Alvarez & Marsal

Challenge: Alvarez & Marsal ImPART GROUP was engaged by the President of the University of Medicine and Dentistry of New Jersey to provide financial and operational assistance in transforming a hospital affiliated with its medical school. After losing nearly $11 million and facing a potential $60 million shortfall, the University was considering a sale of the hospital.

Approach: After a six-week assessment, A&M ImPART GROUP presented the University's President and Board of Directors with a comprehensive approach to improve revenues, expenses, operating effectiveness and quality outcomes. The transformation plan called for changes in the hospital's relationship with existing University partners, new partnerships with external organizations, changes to levels of safety-net reimbursements and managed care contracts, expansion of services to increase non-governmental revenue, development of a durable financial platform by managing costs and service investments, redesign of patient care operating capabilities and core processes, and aggressive follow-up aimed at improving quality. A&M ImPART GROUP instituted an enterprise-wide management process involving multi-disciplinary working groups. This led the organization to embrace the need for change, and served as a vehicle for hospital employees to help solve problems.

Results Achieved: Financial results more than surpassed initial targets; patient care processes improved in the ED, ORs and ICUs; and services in the inpatient and outpatient arenas were poised for growth, while others were phased out or transferred. Overall, the hospital realized bottom-line performance improvements of $5 million in the first year and increments of $5 million each following year; a cash position improvement of $60 million, an increase in net patient revenues by $200 million each year, an increase in average NPSR per adjusted discharge by about 50 percent and a reduction in average length of stay for patients by 33 percent.