June 17, 2008
SSM Cuts Management Jobs Amid Restructuring
By Mary Jo Feldstein, St. Louis Post-Dispatch
Jun. 17--As part of an ongoing restructuring, SSM HealthCare-St. Louis on Monday dismissed 75 members of its management team, including all hospital chief operating officers and vice presidents. Another 25 employees in human resources, finance and other administrative functions were let go earlier this year.
A month after coming on board last year, Chief Executive Jim Sanger reorganized the hospital system into north and south geographic regions and by areas of patient care.
As this centralization occurred, top system leaders realized the hospitals needed more consistent practices to improve patient care and efficiency.
SSM hopes eliminating most top management positions at individual hospitals will reduce redundancy and help the transition. Sanger thinks fewer people making decisions will lead to more consistent decision-making.
"Right now, our hospitals compete with each one another and largely do things differently," Sanger said in a memo to staff, physicians and hospitals' boards on Monday. "Under this new structure, leaders from across our organization will work closely with staff to identify the best elements of each of our hospitals and then use those best practices to create more consistent, highly effective processes at each hospital."
The plan will save money through economies of scale, said J. Stuart Bunderson, an associate professor at Washington University's Olin School of Business.
"It could be a good thing," Bunderson said. "Think of all you save, not only in terms of salaries but in office space and all that goes with that."
The question, Bunderson said, is whether the hospitals are too varied to be managed centrally.
Bob Porter, executive vice president for strategy and business development, sees the changes as an opportunity for SSM's hospitals to work more cooperatively than competitively.
"We had six different entities trying to do the best for that entity," Porter said, referring to the system's local hospitals. "We weren't doing enough to maximize what's best for the whole."
This was Sanger's goal when he announced the reorganization in December but Monday's announcement refines its implementation.
Here's how it will be structured: Each region will have a top leader and an executive vice president. In addition to heading up patient care for the respective region, each executive vice president will manage two system-wide segments -- which include pharmacy and laboratory. Each also will oversee several smaller functions for the region.
"It sends a very strong message that this is one system, not lots of little fiefdoms," Bunderson said. "At least in the short term there will be people who have loyalties and investments in the local facility who will be unhappy with that."
Other changes are still to come. SSM is still working on reorganizing medical services. One possibility would have some hospitals specialize in specific complex conditions while preserving access to more basic treatments at all SSM facilities.
But Porter said he's cautious about using the industry term "centers of excellence." He thinks the end result will be less centralized. He sees the goal as hospitals coordinating and collaborating where it makes the most sense clinically and financially.
The systemwide cuts are separate from about 45 jobs cut at St. Mary's Health Center in Richmond Heights, announced Monday, and 25 positions at DePaul Health Center in Bridgeton that were made earlier this year.
SSM attributed the cuts at those hospitals to lower-than-expected revenue.
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