The University Record, July 1, 2002

Regents hear report about the health of UMHS

By Laurel Thomas Gnagey

The U-M Health System is in good health but is working hard to become even more fit. That was the bottom line of a presentation Executive Vice President for Medical Affairs Gil Omenn made to the Board of Regents June 20.

While the Health System has been innovative in offering new services, finding creative ways to utilize old space, and in recruiting and retaining top notch professionals, it has more to do in the area of cutting costs and in some measures of patient satisfaction, according to Omenn.

By industry standards, he says UMHS fares better than most large health systems. And he says its “outstanding and rising national reputation” is evidence of its success. Even so, Omenn says there is room for improvement in the business practices of the system, in areas such as professional development for staff, standardization of purchasing to reduce costs and patient satisfaction regarding access to care.

Omenn began his presentation to the regents by identifying what he called the Health System’s overriding challenge to “provide world-class medical care while educating the next generation of physicians; contributing substantially to the advance of medical knowledge, technologies and care models; while remaining financially sound.”

He said the key elements to success of UMHS are quality, faculty and staff development, operating margin, productivity, and supply chain management.

In terms of quality, Omenn says 93 percent of patients report satisfaction with their care but only 70 percent are happy with their access to that care. They say getting an appointment and waiting in clinics or the emergency room take too much time. To remedy the access problems, UMHS has developed a number of services for physician and self referral, including M-LINE, MNET, M-Call, “Find a Physician” call center, and a physician and clinic directory. UMHS also is trying to beef up staffing, which will help reduce long wait times.

Patients who are admitted to one of the hospitals provide valuable feedback to the system as well. Omenn says inpatients tell UMHS to focus on education for the patient and family, care for the patient, response to concerns, and attention to emotional and spiritual needs. Despite their suggestions for improvement, those who stay in one of the hospitals say they would recommend UMHS to others (85 percent for adult care and 88 percent for pediatrics).

Omenn says the Health System scores good marks for “multi-stage career development” of its faculty and staff but continues to look for new ways to improve in this area. In addition to numerous programs for physicians, increased effort at professional development for nurses is one of UMHS’s recruitment and retention tools.

In regard to its operating margin, Omenn says the system seeks to retain at least a 2 percent margin, which is accomplished in part by continuing to seek ways to increase capacity. This includes converting traditional hospital beds for cardiac care, expanding use of the surgical center in Livonia, adding outreach clinics in Canton and Brighton, and increasing the emergency department from 32 to 52 treatment areas.

Productivity is improved by increased emphasis on training and on redesigning the ways in which people work, Omenn says.

An area that has made significant progress but has room for improvement, says Omenn, is supply chain management, or the control of pricing, utilization and inventory. He says if physicians were to standardize the instruments and supplies they use, it could result in substantial savings. He used as an example all of the physicians but one on a certain surgical unit who were using the same prosthetic device. The one who was ordering something different cost the health system an extra $5,000 per procedure. “Once the physician was made aware of the difference, he switched to what the others were using.”

Looking ahead, Omenn told regents the future for UMHS is one of continued good health as it invests “in people, buildings, clinical research, infrastructure and clinical expansions.”


Indicators of UMHS Health (July–May 2002)

Operating margin: $1.6 million (1.3 percent)

Revenues: $887 million

(1.1 percent favorable to budget)

Expenses: $876 million

(1.6 percent above budget)

Clinic visits: 1.37 million

(-0.2 percent from budget)

Hospital admissions: 35,943

(0.9 percent above budget)