Most hospital CEOs don't get involved in the mundane work of auditing routine payments to vendors, particularly if they're running a sprawling facility with a $740 million budget and 600 beds. But not every hospital CEO has to run a facility that's been millions in the red for a decade or so, either. So when Michael Young took over as CEO at Atlanta's financially-strapped Grady Memorial Hospital, he decided to take a hands-on approach to money that few CEOs would consider.
Beginning a few days before he started, Young hunkered down and reviewed every check over $1,000 that the hospital had issued to vendors during one week in July. In reviewing the checks, which added up to about $1.7 million, he didn't run into any bright-red flags--certainly nothing that could single-handedly turn around a $40 million deficit--but he did run into some short-term expenses that didn't look right. For example, he found a $100,000 one-week payment for temporary employees, including nurses and X-ray technicians. He's started cutting back on temp use dramatically.
Nonetheless, the exercise definitely was useful, he told the Atlanta Journal-Constitution. "You start asking questions," said Young. "You decide if there are contracts you don't want to pay for anymore, or services you want to bid out again." And even if it doesn't change the hospital's contracting strategy, this kind of mini-audit is helpful in tweaking operations, he notes. For example, during one such review, he noted that Grade seemed to have excessive legal fees, and brought some malpractice reviews in-house. Young intends to do such an audit every week.
To learn more about Young's approach:
- read this Atlanta Journal-Constitution piece
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