Evaluating the Financial Health of Baystate Health System

Baystate Health, Inc.

Baystate Health is the largest health delivery system for Western Massachusetts, with three medical centers located in Springfield, Greenfield, and Ware (Deloitte & Touche, LLP, 2014). Baystate Medical Center (BMC), located in Springfield, is the largest with 715 beds. BMC is the only tertiary care/Level I trauma center for Western Massachusetts and the only neonatal and pediatric ICU for Western New England (Ernst & Young, LLP, 2013). BMC also serves as a teaching hospital for Tufts University Medical School.

The hospitals, clinics, nursing homes, and hospice centers are not-for-profit, tax-exempt organizations providing integrated health care to the region (Deloitte & Touche, LLP, 2014). Baystate Health, Inc. also includes two ambulance services that operate for profit. Baystate Health participates in the Health Safety Net, a state-mandated health insurer system, which provides health insurance coverage to almost all Massachusetts residents through a combination of public and subsidized private insurers. Under this program, Baystate Health provided $20.4 million in free care in 2013 and the total write-offs for 2013 was $46.8 million. Total revenues for 2013 from Medicaid, Medicare, private insurers, and self-pay was $1.08 billion. When combined with income from premiums, dividends on investments, and the mobilization of assets, total revenues for 2013 reached $1.72 billion. By comparison, total operating expenses was $1.67 billion for 2013. Baystate Health therefore increased its assets by $166 million during 2013, over and above operating costs.

One of the practice issues Baystate Health faced in the recent past was the prevalence of medication errors and adverse drug events (ADEs) (Hakim, 2014). ADEs have the potential for causing harm, increasing the length of stay and operating costs, and on rare occasions leading to the death of patient. Baystate Health implemented a lean management approach designed to improve medication reconciliation during the admissions and discharge process, thereby helping to decrease the prevalence of adverse events in inpatient and ambulatory settings. Lean management was originated in Japan and involves investigating errors in real-time ad preventing future errors. The result was the development and implementation of the Plan-Do-Check-Act (PDCA) cycle tool for medication reconciliation. The main concerns were completing the reconciliation within 24 hours of admission. The main change implemented was creating a dedicated position filled by a pharmacy intern or resident, who would work full-time on medication reconciliation. In the past, nurses and physicians were tasked with interviewing patients, family members, primary care doctors, and pharmacies for this information. Dramatic improvements were realized for both medical and surgical units in BMC, with overall completion rates reaching 99%.