October/November 1999

Catholic Health Initiatives Realigns Organization to Improve Operating Performance

Realignment to streamline management, strengthen accountability and move decision making closer to market-based organizations

At a national meeting of market-based organization chief executive officers on September 16, Kevin Lofton, chief operating officer of Catholic Health Initiatives, announced a realignment of Catholic Health Initiatives’ operating structure. Lofton, who said the realignment reflects current operational realities, also discussed the serious financial challenges facing health care systems in this country including Catholic Health Initiatives. "Because Catholic Health Initiatives’ operating performance for fiscal year 1999 was significantly below expectations, improvement in operating performance will be our major focus in fiscal year 2000," he said. "This realignment moves us toward that goal by streamlining management and moving decision making closer to the market-based organizations. Within this structure, we will provide the tools, information and assistance to enable leaders throughout our organization to achieve specific performance improvement goals." New reporting relationships for market-based organizations The realignment eliminated the position of group president, to which market-based organizations previously reported either directly or through a group vice president. Each market-based organization now reports to a senior vice president of operations (see organization chart on page 3). "This change eliminates a level of management within our national organization by consolidating the group president and vice president levels," said Lofton. "This enables our operations and market-based organization leaders to work together more effectively, to better define their roles and to make decisions more quickly. The new reporting relationships also encourage greater leveraging of regional strengths and closer cooperation among market-based organizations in a geographic area." The realignment includes a new national performance management service under the direction of senior vice president Ruth W. Brinkley. "This resource will prioritize performance improvement requirements and provide teams to work with the market-based organization chief executive officers and leadership to achieve their operational performance improvement goals," said Lofton. National reporting systems and benchmarks will be developed to identify and share best practices throughout the country. Lofton also announced that the freeze on market-based organization hiring instituted by the national office in January 1999 has been lifted. Consistent with our goal of strengthening the balance of local accountability and responsibility, staffing decisions for market-based organizations that are not achieving budget will be made by those local organizations in consultation with the respective senior vice president of operations. National office, resource group expenditures under review The realignment is expected to have an impact on Catholic Health Initiatives’ national organization, including service centers and resource groups. During October and November, resource group leaders will evaluate how the operational realignment will affect resource group staffing and costs. "Until this review process is complete, there will be no changes in the relationships between resource groups and market-based organizations," said Lofton. "It is essential that the leaders of our market-based organizations and resource groups understand the imperative that we must achieve our operational performance goals in order to preserve our health care ministry for the future." During the next six months, Catholic Health Initiatives will also evaluate national office sites to assess office needs and costs. "It is our expectation that we will consolidate and close some of our current national office sites during the next year," said Michael Fordyce, chief administrative officer. "We will keep everyone informed as decisions are made about the national organization structure." In addition, Geraldine Hoyler, CSC, senior vice president of finance and treasury, announced two strategies that will help avoid unexpected restructuring charges in the future. "Beginning January 1, Catholic Healthcare Audit Network (CHAN) will audit 100 percent of an organization’s other assets," said Hoyler. "Also, a new policy will be introduced in January 2000 that will relate to the booking of contractual allowances and bad debts." Environmental assessment helps clarify health care issues Lofton noted that the realignment occurs in the midst of harsh economic realities that make it challenging for market-based organizations to live out the mission of Catholic Health Initiatives while maintaining economic viability. To help leaders throughout Catholic Health Initiatives understand and anticipate changes in health care, the Strategy and Business Development Resource Group recently completed a comprehensive Health Care Environmental Assessment. "The assessment synthesizes research findings, supporting data and opinions from a wide range of health care sources," said John DiCola, senior vice president of strategy and business development. "It provides our entire organization with a consistent framework for understanding the truly complex issues facing health care in the United States, as well as the most important strategic challenges facing the Catholic health ministry and Catholic Health Initiatives." Copies of the Environmental Assessment were distributed throughout Catholic Health Initiatives in August.