Flash back to the end of 2008 and the Deficit Reduction Act of 2005. At 14-site Scottsdale Medical Imaging (SMIL) in Arizona, word comes down from the board of directors to senior management: Our shareholders are concerned. We’ve got to do something to stem the financial bleeding.
Reflecting on that pivotal moment from the vantage point of 2015, Jessica Montgomery, MBA, SMIL’s chief operations officer, recalls that the directive came with one reassuring caveat: Sweeping staff cuts were off the table. “We saw places across the country laying people off, and our philosophy is that you implode your culture when you do that,” she says. “I’ve been here since 1998, and our culture has always been about taking care of not only the patient but also each other.”
How, then, did Montgomery manage to shave some 15% off payroll—cutting it from $17 million for 425 employees then to $15 million for 320 now—while maintaining morale and improving productivity?
First, by reviewing every job description, analyzing the time it takes to complete nearly every task, and setting goals to close the gaps between the total hours people work and their corresponding hourly output. Stated another way, it was down with human downtime. For front-desk and other support staff, this meant agreeing to time parameters for various daily duties. For the technologists, it meant recording work RVUs just as the radiologists had begun doing.
“We used the Medicare wRVUs, because I figured the ratio of time it takes for a radiologist to read the scan is about the same ratio of time it takes the technologist to perform it,” Montgomery explains. “We calculated each employee’s hours worked alongside the number of exams that went through the department and the total number of people on our staff. From that we came up with the math and the goals.”
Next came moving the technologists from single-site assignments to rotations between several sites within a reasonable radius of where they live. This facilitated coverage for vacations and sick days, for example, without a reliance on even slight overstaffing.
As might be expected in a time of change and heightened watchfulness, attrition happened. As people left, whether by their own choice or SMIL’s, Montgomery evaluated the capacity of the remaining staff to take on the former worker’s duties. “A lot of times we found that we could absorb the work,” she says. “As we were getting efficient,”—site by site and modality by modality—“we were reducing the size of the global staff.”
No expense left unexamined
Paring the staff to a leaner, highly efficient workforce has been the single biggest source of cost containment, says Montgomery. It’s far, however, from the only substantial source of savings.
For example, when Montgomery inspected the general ledger in 2009, as the belt-tightening project was getting underway in earnest, she noticed film costs totaling nearly $350,000. This sum fairly leapt off the page, since SMIL had been digital since the early 2000s.
“It turned out that the technologists were just giving patients what they asked for when they requested their films,” Montgomery says. “We retrained the staff to give every patient a CD unless it’s noted in our database that a particular physician specifically wants film.” Otherwise it’s 10-cent CDs on the house for every patient, every time—to the tune of nearly a quarter-million dollars in savings.
Up next were service contracts, long a source of unrewarded spending. For the advanced-imaging equipment—MR, CT, nuclear medicine and PET—all purchasing would go to a single OEM, including platinum-level service contracts. “Time is money,” Montgomery says, adding that SMIL required 99% uptime on the big-ticket machines. For ultrasound and x-ray, Montgomery coaxed the other members of the management team to accept a little more risk.
It’s paying off. “We’re saving $176,000 a year just by saying, ‘You know what? If an ultrasound probe goes down, it’s $10,000 bucks. Let’s just replace it,” says Montgomery. “We could even have an ultrasound machine in a closet and just harvest the parts when we need them.”
A key move to manage the equipment for greatest cost-effectiveness has been working with a database called an equipment management tracking system (EMTS). “I had our programmers build it in-house and enter every piece of equipment, 186 pieces in all, along with contact info for who to call when something goes down,” Montgomery explains. All staff have been trained on the