April 8, 2005

Leadership meeting focuses on finances, facilities and fitness

Hospital finances were a major focus of a leadership meeting held April 4 in which Katie Hope, MGH budget director, updated managers, supervisors and department heads about the year-to-date financial results for FY'05 and the operating budget schedule and process for FY'06.

While the hospital's financial outlook has improved for March, the year-to-date operating results through February lag behind budget by $8.6 million. Total revenue was behind budget by $20.5 million, with $19.6 million of this unfavorable variance coming from net patient service revenue. Below-budget volume was the major
contributor to the unfavorable patient revenue. Favorable total expenses have partially offset this revenue picture, with expenses at $11.9 million under budget through February.

Hope explained that while volume did rebound in March with admissions exceeding budget by 47, year-to-date admissions are still 582 behind budget and 430 below the prior year. Length of stay (LOS) decreased below six days for the second time this fiscal year, averaging 5.91 days in March, but year-to-date LOS of 6.11 days is 0.24 higher than budget.

Hope also outlined the FY'06 budget process that will begin two weeks earlier than in previous years. Managers, supervisors and department heads can begin working on their operating budgets April 11 and must submit their completed budgets by April 29. Training sessions will be held for users of the MGH's online budget system, called SRC, from April 6 to 14. Hope also noted that while the forecast for FY'06 is preliminary, the initial analysis suggests that unavoidable expenses will increase and exceed the projected revenue growth, causing a challenging budget season.

Also at the leadership meeting, Rick Bringhurst, MD, senior vice president for Medical Services and Research Affairs, gave an update about the new Richard B. Simches Research Center, located at Charles River Plaza. Researchers and staff will begin moving into the new building in several phases beginning in May. The center will house four thematic research centers, seven departmental programs, the MGH Clinical Research Program, a conference center, a cafe and a computer data center.

The leadership meeting concluded with a rousing presentation of the Be Fit program, led by Kate Brill Daley, director of the Clubs at Charles River Park, who got members of the audience on their feet to do lunges and knee bends to illustrate the importance of exercise. The Be Fit program — now in a pilot stage — is a fitness and nutrition program sponsored by the Clubs and MGH Nutrition and Food Services. Jeff Davis, senior vice president of Human Resources, gave an overview of the program, and Lillian Sonnenberg, DSc, RD, senior manager of the MGH Nutrition Center, joined Brill Daley in describing the success of the program and its future course as the pilot stage comes to a close in three weeks and then moves into a second phase.