ONE HENRY FORD: THREE-YEAR STRENGTH AND SUSTAINABILITY PLAN
FAQ
Q. What is the One Henry Ford: Our Three-Year Strength and Sustainability Plan?
A. This plan is Henry Ford’s new approach to help us prepare for the changes our organization is
facing as a result of the Affordable Care Act (ACA), including increased reductions in payment from
the government and commercial payors.
It has multiple components including a Strategic Growth initiative, led by CEO Nancy Schlichting,
which will focus on creating the energy and alignment necessary to drive strategic and rapid growth.
The second component of the work, focused on transformation to become a leaner, more efficient
system, is being led by President Bob Riney. Our goal is to achieve a cost reduction of $300 million
over the next three years. This 10% reduction in our overall expenses from 2014-2016 will help us to
achieve a cost structure that will make us more attractive to insurers and patients who are often
paying a larger percentage of overall health care expenses.
We will also look at delivery system design and efficiency and the integration of clinical product lines
and development of regional clinical models across the System to reduce duplication and waste, and
standardize and improve the patient experience.
Q. What is the timeline for the Plan?
A. The plan has a three-year (2014-2016) goal for achieving significant growth levels and cost
savings. It will be rolled out in phases and implemented throughout the three-year period. Timelines
for specific phases are in development. This strategic work we are doing to help manage, grow and
make our business more efficient has been and will always be a priority for Henry Ford Health
System.
Q. How is Henry Ford being impacted by the Affordable Care Act and the reduction of
Medicare and Medicaid payments?
A. Similar to what other hospitals and health care systems across the country are facing, Henry Ford
is being heavily impacted by payment cuts from both the government as well as private insurance
companies.
Funding for about half of the government’s cost to cover the uninsured comes from reducing
Medicare and Medicaid payments. For Henry Ford Health System, these payment cuts total
$82 million in 2014. An additional $2 million in payment cuts is expected in 2014 from value-based
purchasing, where the federal government and insurance companies pay hospitals based on quality
outcomes and, in the case of Medicare, by the ratings patients give hospitals for how satisfied they
are with the care, communication and service (HCAHPS).
Further payment cuts are being considered, which could result in reimbursement reductions of more
than $100 million annually.
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Q. How does this Plan align with some of our current improvement initiatives?
A. There are other growth and expense reduction projects currently underway across the System that
will nicely complement the initiatives of the Strength and Sustainability Plan. Some of the existing
projects include: Revenue Cycle restructuring, Epic optimization, Henry Ford Medical Group
Operational improvements, IT insourcing and centralization, Supply Chain, Maximizing In-sourcing,
and Community Care growth of contract pharmacies.
Q. If the System had not invested in Epic, would we need to reduce expenses?
A. Yes. The payment cuts we are facing because of decreased reimbursement from the federal
government and private insurance companies is a primary reason we need to grow our business and
reduce costs as outlined in the Plan. Henry Ford Health System couldn’t afford to defer investment in
Epic. Our new investments in technology, specifically Project Helios and HAP 2.0, are helping to
make our patient care delivery processes more efficient and our revenue cycle and collections
processes more effective.
Q. Will there be a reduction in the workforce?
A. Through the efforts of the team focused on “Leadership Review,” we will be looking at leader
positions, leaders’ span of control and ways to reduce management layers. This will result in some
position redesign and reductions beyond leadership and some staff positions will be eliminated; as
always, we will be keeping many open positions in our health system on hold during this time so that
we can match displaced employees with jobs in which they are qualified.
Q. How will managers and employees be kept informed of the progress of the Strength and
Sustainability Plan?
A. We will make every attempt to communicate our progress and any changes that might take place
in the organization as details are finalized. Communications will take place at both the Business Unit
and System levels using our regular communications tools, including email, HENRY, vodcasts,
huddles, newsletters and Morning Post.
Q. What additional ways can staff participate in the System growth and expense reduction
initiatives?
A. We have set up a special page on HENRY that provides you with additional information on this
initiative. You can also visit that page to share cost-savings ideas and ask questions. We are happy
to consider your ideas and will provide answers to your questions. Go to
http://henry.hfhs.org/body.cfm?id=18296 to submit your ideas and suggestions.
This page also will be used for regular updates as work progresses in each of the areas outlined.
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