What's Next For Landmark

Oct 29, 2013

The deal still has to close, which officials expect by sometime in December. But now some of the hard work begins. How exactly do you turn a faltering hospital around?

Luis Leon, director of operations with Landmark's new owner, Prime Healthcare, told me in an interview that any profit margin would be "nice" from their new acquisition, but that he didn't really have a number in mind. I have a hard time believing that. But Leon did tell me that the first order of business is to stem Landmark's losses and get the hospital to at least break even. Landmark's president Richard Charest told me that they're on their way to achieving that, having halved their losses over the past year and actually generating some positive cash flow in seven out of the last 11 months.

But how are they doing it? Turning a money-losing institution around is no small task. To start, Prime has been sending teams of experts in to help Landmark "tweak" its processes over the past year, looking for any place to create efficiency and move more patients more quickly - and, hopefully, safely. Prime's Luis Leon gave me a few examples. One: Landmark currently lets doctors block off time on operating room schedules, whether they're planning on using them or not. And that means the rooms are staffed and ready but, perhaps, wastefully. Stopping that practice and allowing doctors to schedule a room only when they have a procedure planned could save some money, then.

Here's another example he gave me, having to do with the number of beds in an emergency room or other departments that are hooked up to telemetry - the screens with the squiggly lines that monitor your heart rate, among other signals. Not having enough of those, he said, can back things up and be inefficient.

“Let’s say you only have 20 beds that are monitored, then the patients will wait in the ER because they don’t have a monitored bed for them. So they wait in the ER on a gurney for hours until they can move a patient out of telemetry or they get a discharge. This way if all the beds in the ER are monitored, then you don’t have that issue. You have a patient that has to be admitted they don’t have to wait for hours in the ER.”

So Prime is buying new telemetry equipment - an investment Landmark could never have made on its own.

Landmark president Richard Charest told me that they've got some efficiency targets in mind. One is based on a Medicare measure:

“By efficiency, I don’t mean squeezing dollars out. By efficiency, I mean trying to make sure we’re treating patients within the' geometric mean' length of stay. I know that’s a big term. That’s a term Medicare will assign to a patient depending on their disease, how long they would envision that a patient should be in the hospital. So we use that as a target and you streamline your processes to try and arrive at that.”

The benefit for the hospital is that Medicare and Medicaid will only pay so much. If you spend more than that caring for a patient, it's your loss. Provide care more efficiently, you narrow the gap between what insurance covers and what services cost.

The benefit for patients? That remains to be seen. For now, it seems, most everyone connected with Landmark is just thrilled - and relieved - that the hospital won't have to close its doors.