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Case Study

Empowering physicians to cut millions in cost at Kettering Health Network


    About KHN: Kettering Health Network is comprised of ten hospitals, Kettering College, 120 outpatient facilities, and a physician group of 2000+ team members and 640+ providers

    Kettering Health Network (KHN) engaged a consulting firm to cut orthopedic costs from the medical group, a surprise that sparked dissatisfaction of physicians across multiple service lines. The executives of the medical group, Kettering Physician Network (KPN), responded by requesting ownership of system-wide cost reduction and committed to delivering $10M in system savings within a year.

    Tim and George, CFO and CEO of KPN, tapped key physician leaders to lead this effort.

    Tim, George, and the physicians leading prioritized service lines— orthopedics, heart and vascular, surgery, brain and spine, and oncology—spent a day with the Advisory Board discussing examples of medical group leadership and best practices in cost reduction, which put the physicians in an administrative mindset and prepared them for the initiative.

    These physician leaders met regularly with KPN executives, operations and supply chain colleagues to review detailed cost data, and identify opportunities to tackle supply costs, length of stay, ICU and OR utilization and clinical variation without compromising their ability to deliver outstanding patient care. The physicians worked with their peers and teams to capture the identified opportunity, and are creating a culture that is committed to quality but also cost efficient.

    Within 6 months, the medical group was on track to deliver $13M in year one.

    And they are working to deliver additional $16M in the second year of the initiative. Perhaps more significant, however, is that the tenor of the medical group’s relationship with the health system has changed. Physicians no longer feel like they are just a referral source and along for the ride—instead, they feel like they are at the table as a true partner to the health system in planning for the future and navigating the seismic shifts in healthcare.

    Is your medical group ready to take on system-wide initiatives?

    The shift towards ambulatory care creates opportunity for medical groups to elevate their leadership position. Many groups, having mastered the basics of practice management, are now taking on implementation of enterprise-wide strategies. Use our infographic to determine where your medical group should focus.

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    The Advisory Board is a great sounding board. They provide whitepapers, information, advice and benchmark data, and connect me with other CFOs and COOs so I can ask questions, learn about what other medical groups are doing, and figure out how we can better ourselves.

    Tim Ko

    CFO, Kettering Physician Network

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