The Situation:

Itasca Medical Center (IMC) was the first hospital established by a county government in Minnesota.  Built in 1916, the building had been added on to in the 1930s, 40s and 50s but it was very inefficient and out of date.  The County Board, surprised by the first ever, hospital budgeted deficit, desired an in depth review of the contract of the management firm hired to operate the facility and to ascertain whether they were doing a proper job of management.  In addition to the building and budget issues, physicians and community business leaders were concerned about the continued economic viability of the hospital. 

The Solution:

A review was conducted of audited financial reports, data on outmigration and market share, strategic plans, hospital and county census, medical staff recruiting plans, etc.  This information was supplemented with several days of on-site interviews.

The following key issues were identified:
*Outmigration due to a lack of local specialty physicians.
*Poor financial condition of the hospital with a budgeted loss and declining inpatient   volume.
*High employee cost structure and high unionization rates.
*The need for speed and flexibility in governance and the difficulties with a county verses a community-based governance.
*An old, traditional, inpatient-based facility in need of upgrading.
*Lack of specialty physicians.
*Perception of poor quality, somewhat tied to poor facilities.
*Perception that management has lost credibility.

Recommendations were made to:
*Develop a Strategic Plan
*Improve Asset Performance
*Cut Costs
*Understand Ambulatory Care
*Participate in Distributed Networks
*Prioritize Investments
*Integrate Hospital and Physician Office Facilities
*Rethink Inpatient Requirements
*Focus Healthcare Delivery on Outcomes