Bermuda shorts 7: End of the beginning
by Bill Shields
05 June 2018
In April 2017, after 30 years working in NHS finance, former HFMA chairman Bill Shields moved to Bermuda as chief financial officer of the territory’s hospitals board. In this series of blogs, he documents his experiences.
I recently attended a conference at Partners Healthcare in Boston, Massachusetts. Partners is an eight hospital health system with hospitals throughout New England, two academic medical centres – Massachusetts General and Brigham and Women’s – and an enviable relationship with Harvard Medical School.
The conference was hosted by EPSi, the vendor that provides our budgeting and costing system and that has been on island helping us implement this as part of budget setting for 2018/19. This has been a very new process for Bermuda Hospitals Board (BHB) – in the past budgeting has been incremental, based on historical allocations and with little time being left for analysis and performance management.
The process has also required much greater dialogue and collaboration: setting budgets with the organisation, rather than ‘doing budgeting’ to departments. This has needed a significant training programme, particularly in upskilling budget holders, and we’ve also had to recruit new management accounting staff. We also had to procure the new budgeting and costing system and develop and raise awareness of the need for reserves and contingencies to assist in forecasting and delivering the outturn position.
Sticking with forecasting, 2017/18 results have been significantly better than anticipated. We originally set a $40m deficit budget, but at one point we saw this deteriorate to a $50m forecast outturn. So, I was very pleased to end the year with a much improved $22m deficit. This featured a $16m improvement in receivables and a $6m underspend against the operational expenses (non-pay) budget.
While this is a great start and has allowed a break-even budget to be set for 2018/19, it is really only the end of the beginning. Now we are looking to develop costing, business intelligence and service line reporting as well as overhaul our revenue cycle management processes and systems, undertake a ledger upgrade and roll out performance reporting and management.
All of these will be facilitated by completing the expansion and development of the finance and information directorate and establishment of a comprehensive training programme with performance objectives agreed for all members of the team.
Away from work and without wanting to make too many of you too jealous, we’re just coming to the end of two weeks’ of almost continuous sunshine with temperatures in the high 80s. Unfortunately, humidity close to 100 has meant the return of the Bermuda shorts and knee length socks – not something I ever expected to wear to work in my early 50s, but very necessary to combat the heat and risk of sun burn – honestly!
The higher temperatures also mean a significant upturn in tourism with two to three cruise ships in Bermuda most days. As I can attest to, having fallen off my bike more than once, this also, inevitably, leads to an increase in emergency room attendances from road accidents. Our additional costs are covered by the comprehensive medical insurance carried by the overwhelming majority of tourists visiting from the US.
We are not relying on top-line revenue, however, to improve our financial position and will shortly select a partner to support our service improvement programme. This aims to improve quality and efficiency, while delivering our annual plan and medium term financial strategy.
Cost reduction is not prevalent in fee-for-service health systems, so a focus on the old chestnuts of reduced length of stay, improved operating room (theatre) productivity and enhanced patient flow is being sought. I will update you on progress as this occurs.
Significant patient flows also occur in the opposite direction. Our clinical services plan identified almost $100m of activity leaving Bermuda for the US East Coast every year. You might expect this given that BHB’s range of services is probably slightly short of those provided by a typical UK district general hospital. But there is significant anecdotal evidence of insurers paying for treatment in the US that could be carried out on island at a significantly lower cost to the country.
We are hoping that, through a clinical affiliation agreement, we will be able to establish an alliance with a world-renowned US hospital or health system, that will lead to a reverse in this practice: with care being delivered on the island, closer to home for patients and with a positive revenue benefit to BHB.
It may also, in time, present a more sustainable model of training, recruitment and development of staff given the shortage of trained clinical and medical recruits on an island of 60,000. And it could allow us to piggy-back on a technology solution for development of our electronic health record that would otherwise be unaffordable or unattainable given the diseconomies of provision.
The next phase of selection takes place in June when I will also be in Las Vegas (yes, I know it’s a hard life!) at the US HFMA annual national institute conference and so I will provide a further update on all of these issues and more from this side of the Atlantic next time.
Until then, good day.
Read our other 'Bermuda shorts' blogs here:
Bermuda shorts 1: the heat is on
Bermuda shorts 2: a collection of firsts
Bermuda shorts 3: putting the focus on costs
Bermuda shorts 4: dark and stormy
Bermuda shorts 5:lost in the triangle
Bermuda shorts 6: flying a kite
Case studies from the HFMA governance award 2018
13 June 2019
Summary of the Interim NHS people plan
06 June 2019
Education and events
HFMA summer conference
04 July 2019
Chair, Non-Executive Director & Lay Member Faculty Forum
10 October 2019