Adventist HealthCare Limited (AHCL), which runs Sydney Adventist Hospital and San Day Surgery Hornsby in Sydney, New South Wales, Australia, has recently undertaken a thorough and considered review of the organization to pursue its vision in a more effective way.
“The San has served the community for 118 years, and we are committed to ensuring the continued success and growth of AHCL to fulfill its vision: ‘To be a thriving faith-based provider of world-class care, inspiring hope and wellbeing,’ ” AHCL CEO Brett Goods said.
“To that end, it is essential to have a structure that is fit for purpose; to support our ability to invest in our people and infrastructure and technology; to have the ability to take up new opportunities that arise; to be agile and readily adjust to market changes; and to invest in quality improvement and research.”
AHCL has made progress on its operating performance in recent years. Its operational costs, however, remain too high — despite additional rigor around cost management and concerted efforts to grow new business opportunities.
The hospital’s income is reliant on the volume of patients and payments from health funds. Considerable focus and effort have seen AHCL adopt many innovative strategies to provide new patient services and increase patient numbers. Examples include the new Blackouts & Faints Clinic and “Swaddle” — the Australian-first agreement with HCF health fund to provide no-gap maternity cover from conception to birth.
“Negotiating fair hospital contracts with health funds, as well as improving clinical documentation, are also part of our efforts to make sure AHCL gets paid correctly by health funds for the great service we provide,” Goods said.
The COVID-19 pandemic has had an impact on AHCL's finances. In March 2020, the government shutdown of all but emergency surgery in hospitals Australia-wide saw AHCL's operating theater activity drop to 27 percent of normal. It took several months before the restrictions eased and operating theatres — the hospital's engine room — returned to regular business.
“We’ve been grateful to receive COVID-related government assistance over the past ten months; however, this does not cover all of AHCL’s COVID-related costs,” Goods said. “COVID costs the San an additional AU$400,000 [about US$310,000] per month on extra cleaning, extra staff training, personal protective equipment (PPE), and the staffing of COVID-screening stations across the organization. And while the pandemic continues, the government’s COVID subsidies to hospitals will cease in March this year.
“Given these contributing factors — including rapid changes in the health-care sector and the broader economy — it is essential AHCL has the right organizational structure to enable greater access to capital funds to reinvest in all elements of the business to help reach our vision.
“A key contributor to expenditure is labor cost, and AHCL has taken steps to reduce labor costs, starting by reducing the number of executives from six to four, three years ago.”
On February 9, 2021, AHCL implemented a further strategic adjustment of some roles and reporting lines. The revised structure will affect 35 positions and a number of associated departments.
“Change is difficult, and the new structure will include redundancies, redeployments, or reduction of hours in some areas, and additional responsibilities or changes to reporting lines in other areas. Significant effort has been made to ensure patient-care roles are not included in the restructuring,” Goods said.
“We recognize that changes in structure will significantly affect some individuals and teams and, as the Executive, we grappled with that, while trying to stay focused on the needs of the whole organization, its mission, and its vision. We believe the new organizational structure will put AHCL in a better position for a stronger, enduring future, enabling us to progress towards our aspired vision.
“There are things that will be uncomfortable in this process — we will be saying goodbye to some people who have been here for a long time, and we are very thankful for their contribution to the San.”
The restructuring process is expected to take several weeks. AHCL has engaged Converge International to provide outplacement services and staff support for individuals directly affected by the restructuring and support them in their transition to new employment. San Spiritual Care Services will also provide staff support.
“Our commitment remains to ensure this challenging process is driven by our values of dignity, excellence, integrity, and continuity,” Goods said. “We are passionate about our mission of delivering Christianity in Action by caring for the body, mind, and spirit of our patients, colleagues, community, and ourselves.”