We at CHRISTUS Health have much to be thankful for this year, especially the opportunity to care for people who turn their most precious gift—their lives—over to us.
However, it may be more difficult for many of us to stop and give thanks this holiday season. It is true that over the past year the CHRISTUS family has endured hurricanes, tough economic times, turmoil in the world at large and other valleys on our Journey to Excellence.
But I believe that tough times make clearer the importance of celebrating our incremental victories and giving thanks for the blessings we do have in our lives, both personally and professionally. As we journey toward our 10th anniversary in February of next year and as many of us prepare to spend the holiday season with our families, we pause to appreciate the blessing of being a part of the CHRISTUS family.
I continue to be incredibly proud to be a part of this wonderful family, which works together during good times and bad to support and care for each other as well as extend the healing ministry of Jesus Christ to our patients and residents each day. I was once again humbled this year that as we faced multiple hurricanes targeting our regions, every CHRISTUS Associate continued to go above and beyond the call of duty in their responses to the hurricanes and their willingness to serve our patients and their fellow Associates.
Every day, in each of our facilities, services and programs, members of the CHRISTUS family are creating Miracle Moments by bringing hope and health to people who are scared, sick, vulnerable or just need a helping hand. May God bless each of us as we continue this sacred work.
Wednesday, November 26, 2008
Wednesday, November 19, 2008
An Innovative Solution for Those with Mental Illness (Part I)
As we discussed in my last blog post, Catholic Health World, a publication of the Catholic Health Association of the United States, recently published an article on CHRISTUS’ practice of using Community Health Workers (CHWs) to help patients access behavioral health services in Texas.
We originally used CHWs to help patients get through the health care system as expeditiously possible and provide them with resources that permit them to monitor their health care status at home, hoping that they will require less costly health care services in the future.
In the city of Corpus Christi, Texas and other rural communities in the area where CHRISTUS facilities are located, CHWs are participating in a pilot program to help patients with mental illness. It is clear that limited resources are allocated to mental health, especially in remote rural communities.
These CHWs are tasked with making sure that seriously mentally ill patients get their medical and dental needs met and that medical patients get screened and treated for situational depression, debilitating anxiety and substance abuse. To be considered for care by a CHW specializing in helping clients with mental illness, a patient must have had two psychiatric hospitalizations in as many months or had three psychiatric admissions within 12 months. Patients are also usually uninsured and can’t be currently enrolled as clients of the state’s Community Mental Health and Mental Retardation system, which provides medical services exclusively to people with bipolar disorder, schizophrenia and major depression. Patients generally stay in the program for three months.
They are offered the Aggressive Community Treatment program (ACT), which is reserved for patients who have no resources, poor life skills and nowhere else to turn. ACT is free to patients. In this way, it addresses not only poor mental health, but many of the contributing factors that exacerbate it.
Some of these CHWs meet candidates for the program while they are patiens in the behavioral health unit at CHRISTUS Spohn Hospital Corpus Christi – Memorial. They then offer to help the patient with some of the factors that fueled the chain of events that led them to a hospitalization. Eventually, the CHW will hand these patients totally to the care of the state’s mental health system, but in the first 90 days after psychiatric hospitalization—a critical time—the CHW works to stabilize a patient on medication as directed and aid in securing everything from sobriety programs, housing aid and job hunting assistance. Many times, the CHW will check in on new patients daily.
We have seen this pilot program bring impressive results in South Texas. One of the best measures of success in the treatment of serious mental illness is the measure of time that patients can successfully function in the community. Only six of approximately 40 individuals in the program in the first year were readmitted to the hospital.
It is important as CHRISTUS continues to care for our patients in these increasingly tough financial times that we remain committed to our mission and ensuring that we have the resources to sustain this care for years to come. One of the ways we do this is by creating new programs that care for our communities in cost-effective ways.
It is my belief that in a system the size of CHRISTUS Health, someone, somewhere has devised a best practice for almost every action we undertake in our facilities. That is why we are so committed to our Touchstone Awards—which annually recognize best practices throughout our system. This Community Health Worker program is just one of the examples of innovation at work in CHRISTUS Health, and I am hopeful that we will continue to collect data and share this as a proven best practice in the future.
We originally used CHWs to help patients get through the health care system as expeditiously possible and provide them with resources that permit them to monitor their health care status at home, hoping that they will require less costly health care services in the future.
In the city of Corpus Christi, Texas and other rural communities in the area where CHRISTUS facilities are located, CHWs are participating in a pilot program to help patients with mental illness. It is clear that limited resources are allocated to mental health, especially in remote rural communities.
These CHWs are tasked with making sure that seriously mentally ill patients get their medical and dental needs met and that medical patients get screened and treated for situational depression, debilitating anxiety and substance abuse. To be considered for care by a CHW specializing in helping clients with mental illness, a patient must have had two psychiatric hospitalizations in as many months or had three psychiatric admissions within 12 months. Patients are also usually uninsured and can’t be currently enrolled as clients of the state’s Community Mental Health and Mental Retardation system, which provides medical services exclusively to people with bipolar disorder, schizophrenia and major depression. Patients generally stay in the program for three months.
They are offered the Aggressive Community Treatment program (ACT), which is reserved for patients who have no resources, poor life skills and nowhere else to turn. ACT is free to patients. In this way, it addresses not only poor mental health, but many of the contributing factors that exacerbate it.
Some of these CHWs meet candidates for the program while they are patiens in the behavioral health unit at CHRISTUS Spohn Hospital Corpus Christi – Memorial. They then offer to help the patient with some of the factors that fueled the chain of events that led them to a hospitalization. Eventually, the CHW will hand these patients totally to the care of the state’s mental health system, but in the first 90 days after psychiatric hospitalization—a critical time—the CHW works to stabilize a patient on medication as directed and aid in securing everything from sobriety programs, housing aid and job hunting assistance. Many times, the CHW will check in on new patients daily.
We have seen this pilot program bring impressive results in South Texas. One of the best measures of success in the treatment of serious mental illness is the measure of time that patients can successfully function in the community. Only six of approximately 40 individuals in the program in the first year were readmitted to the hospital.
It is important as CHRISTUS continues to care for our patients in these increasingly tough financial times that we remain committed to our mission and ensuring that we have the resources to sustain this care for years to come. One of the ways we do this is by creating new programs that care for our communities in cost-effective ways.
It is my belief that in a system the size of CHRISTUS Health, someone, somewhere has devised a best practice for almost every action we undertake in our facilities. That is why we are so committed to our Touchstone Awards—which annually recognize best practices throughout our system. This Community Health Worker program is just one of the examples of innovation at work in CHRISTUS Health, and I am hopeful that we will continue to collect data and share this as a proven best practice in the future.
Wednesday, November 12, 2008
An Innovative Solution for Those with Mental Illness (Part I)
Catholic Health World, a publication of the Catholic Health Association of the United States, recently published an article on CHRISTUS’ practice of using Community Health Workers to help patients access behavioral health services in Texas.
I have said before that I believe the health care industry has failed miserably in the delivery of behavioral health.
As recently as ten years ago, many inpatient behavioral health facilities were cleared and closed, driven especially by the rapid decline of reimbursement by both governmental and private insurers. (In addition, it was believed that the rapid development of medications to treat psychiatric illnesses would clear our inpatient mental health facilities, which has not been the case.) Consequently, our streets became filled with people unable to work or care for themselves, which has added to the growing number of uninsured and underserved in our country.
Therefore, CHRISTUS is working on innovative and cost-effective solutions to aid patients in difficult situations when the resources available to them are few.
The Catholic Health World article summarizes Texas’ problem well, as it is the state “with the highest number of uninsured residents and one of the smallest per-capita public investments in mental health services in the nation.”
Therefore, CHRISTUS is working to strengthen the safety net for these seriously ill patients—many of whom are homeless--by helping them access a number of needed services in addition to mental health assistance, such as housing and job search help.
We do this in South Texas by utilizing Community Health Workers (CHWs), who we have historically used to help clients with high-ED utilization to access health resources at the appropriate level of care, find medical homes and help to prevent and manage chronic illnesses.
These original CHWs were part of an innovative pilot program started in the CHRISTUS Spohn region, and generally do not have a background in health care. However, we provide them with training and then assign them to 9 or 10 chronically ill, uninsured people.
The CHWs really become navigators for these people, to get them as expeditiously through the health care system as possible, but also provide them with resources that permit them to monitor their health care status at home, hoping that they will require less costly health care services as they continue life’s journey.
Our initial data from studying the patients cared for by these general CHWs show that their ED visits have been reduced drastically, the medications they have taken could be eliminated or reduced also, and their activities of daily living are enhanced.
Now, CHWs are being used to assist those with mental illness as well, which I will examine in more depth in my next blog post.
I have said before that I believe the health care industry has failed miserably in the delivery of behavioral health.
As recently as ten years ago, many inpatient behavioral health facilities were cleared and closed, driven especially by the rapid decline of reimbursement by both governmental and private insurers. (In addition, it was believed that the rapid development of medications to treat psychiatric illnesses would clear our inpatient mental health facilities, which has not been the case.) Consequently, our streets became filled with people unable to work or care for themselves, which has added to the growing number of uninsured and underserved in our country.
Therefore, CHRISTUS is working on innovative and cost-effective solutions to aid patients in difficult situations when the resources available to them are few.
The Catholic Health World article summarizes Texas’ problem well, as it is the state “with the highest number of uninsured residents and one of the smallest per-capita public investments in mental health services in the nation.”
Therefore, CHRISTUS is working to strengthen the safety net for these seriously ill patients—many of whom are homeless--by helping them access a number of needed services in addition to mental health assistance, such as housing and job search help.
We do this in South Texas by utilizing Community Health Workers (CHWs), who we have historically used to help clients with high-ED utilization to access health resources at the appropriate level of care, find medical homes and help to prevent and manage chronic illnesses.
These original CHWs were part of an innovative pilot program started in the CHRISTUS Spohn region, and generally do not have a background in health care. However, we provide them with training and then assign them to 9 or 10 chronically ill, uninsured people.
The CHWs really become navigators for these people, to get them as expeditiously through the health care system as possible, but also provide them with resources that permit them to monitor their health care status at home, hoping that they will require less costly health care services as they continue life’s journey.
Our initial data from studying the patients cared for by these general CHWs show that their ED visits have been reduced drastically, the medications they have taken could be eliminated or reduced also, and their activities of daily living are enhanced.
Now, CHWs are being used to assist those with mental illness as well, which I will examine in more depth in my next blog post.
Wednesday, November 5, 2008
Being aware of the signs of failure
Recognizing the reality and concerns expressed in last week’s blog post related to the volatility of the market and the global economic crisis that has ensued, it is undoubtedly important for all health care institutions, including CHRISTUS Health, to be more cognizant of the signs of failure than ever before. I would suggest that there are six clear signs of failure which, if seen early, can hopefully be minimized and also serve as energizers to make sure that incremental successes are cancelling out the failures as quickly as possible.
1. How is your performance measurement, and therefore, your performance credibility? As I believe I have shared before, one of my greatest mistakes in my early leadership years was not having metrics for everything that I was doing or leading in the organization where I worked. You have undoubtedly heard me discuss many times our Journey to Excellence and the metrics associated with our Four Directions, hallmarks of all of our regions and programs both in the U.S. and internationally. Hence, by monitoring these metrics on a daily, weekly or monthly basis, it is very easy to determine if the measurements are being met. If not, then we can reaffirm that there are clear action plans in place to ensure that these metrics are going to be reached in as timely a fashion as possible.
2. Are you focused on the basics of execution? Leadership teams must always demonstrate the ability to do good strategic planning and to articulate the tactics to bring these plans to reality. However, where teams most often fail is the ability to execute these tactics and, more importantly, to hold people in the organization accountable to bringing these plans to fruition. Again, by monitoring metrics as outlined above, one can determine if the execution is successful or not. If the latter is the case, one can quickly reaffirm the need to improve them to the responsible party, or remove the responsible party and replace them with someone who understands the urgency of the day and is willing to take not only the responsibility, but the accountability to fully implement the tactical plans for improvement.
3. Is bad news coming to you regularly? Is each day filled with an array of emails, written communications, telephone calls or personal interactions which indicate that something unexpected--and more importantly, negative--has been occurring more frequently than would normally be the case? In addition, are people presenting these reports without quickly articulating the action plan which they have already put in place to assure you that the problem will quickly be ameliorated? Bad news is expected in the complex health care environment in which we function today. But good leaders in good times never present the bad news without the action plan to turn it around.
4. Is your own team disconnected? In bad times, weak teams become weaker. Finger-pointing is accentuated and excuses run rampant. The resolution of problems in challenging times can rarely be carried out by a single individual in a single department, program, or region, and therefore the cohesiveness of the team and the ability to act in a collaborative and connected way is essential. If this is not happening, then it is most appropriate to pause and do some basic team building exercises, for the solutions that are reached will parallel the effectiveness of the team.
5. Are you unable to confidently predict your outcomes daily, monthly or quarterly? It is imperative that during challenging times, an increase effort be placed on processes to predict at mid-month what the month-end operational margins will be. Likewise, it is important to monitor labor and supply costs on a daily basis and create as much variable budgeting in these two areas as possible to parallel the predicted revenue that they are generating. The degree to which these predictions can be made accurately will be the degree to which the proposed solutions will be successful in addressing the reality of the market volatility.
6. Are the things that you were doing well becoming now the things at which you are failing? Perhaps more important than a snapshot of today’s metrics is the trend of these metrics over the last several months or year. Recognizing, as we have stated before in prior posts, that health care change is never linear, we expect some ups and downs as normal variability as we climb from the valley to the top of the mountain. However, if the trends are showing that the peaks we’ve reached on our climb are no longer in view and we are standing at a much lower level on the mountain for a prolonged period of time, we should be honest with ourselves and understanding that what we thought was hard-wired into our improvement plans was in fact extremely transient, therefore new performance plans must be devised and implemented to replace those that are not working.
Yes, it is imperative that we accept the volatility of the market as what will probably be a longer-term reality for us. But we also must accept that our mission, vision and values cannot be altered during this period of time, and that in fact we must continue to energize ourselves to maintain our Journey to Excellence as our highest priority. These times may require different approaches, different tactics and innovative methodologies to create change, and if we are successful by clearly monitoring the signs of failure and correcting them as quickly as possible, it seems reasonable to expect that reaching the top of the mountain is still extremely important and very possible.
1. How is your performance measurement, and therefore, your performance credibility? As I believe I have shared before, one of my greatest mistakes in my early leadership years was not having metrics for everything that I was doing or leading in the organization where I worked. You have undoubtedly heard me discuss many times our Journey to Excellence and the metrics associated with our Four Directions, hallmarks of all of our regions and programs both in the U.S. and internationally. Hence, by monitoring these metrics on a daily, weekly or monthly basis, it is very easy to determine if the measurements are being met. If not, then we can reaffirm that there are clear action plans in place to ensure that these metrics are going to be reached in as timely a fashion as possible.
2. Are you focused on the basics of execution? Leadership teams must always demonstrate the ability to do good strategic planning and to articulate the tactics to bring these plans to reality. However, where teams most often fail is the ability to execute these tactics and, more importantly, to hold people in the organization accountable to bringing these plans to fruition. Again, by monitoring metrics as outlined above, one can determine if the execution is successful or not. If the latter is the case, one can quickly reaffirm the need to improve them to the responsible party, or remove the responsible party and replace them with someone who understands the urgency of the day and is willing to take not only the responsibility, but the accountability to fully implement the tactical plans for improvement.
3. Is bad news coming to you regularly? Is each day filled with an array of emails, written communications, telephone calls or personal interactions which indicate that something unexpected--and more importantly, negative--has been occurring more frequently than would normally be the case? In addition, are people presenting these reports without quickly articulating the action plan which they have already put in place to assure you that the problem will quickly be ameliorated? Bad news is expected in the complex health care environment in which we function today. But good leaders in good times never present the bad news without the action plan to turn it around.
4. Is your own team disconnected? In bad times, weak teams become weaker. Finger-pointing is accentuated and excuses run rampant. The resolution of problems in challenging times can rarely be carried out by a single individual in a single department, program, or region, and therefore the cohesiveness of the team and the ability to act in a collaborative and connected way is essential. If this is not happening, then it is most appropriate to pause and do some basic team building exercises, for the solutions that are reached will parallel the effectiveness of the team.
5. Are you unable to confidently predict your outcomes daily, monthly or quarterly? It is imperative that during challenging times, an increase effort be placed on processes to predict at mid-month what the month-end operational margins will be. Likewise, it is important to monitor labor and supply costs on a daily basis and create as much variable budgeting in these two areas as possible to parallel the predicted revenue that they are generating. The degree to which these predictions can be made accurately will be the degree to which the proposed solutions will be successful in addressing the reality of the market volatility.
6. Are the things that you were doing well becoming now the things at which you are failing? Perhaps more important than a snapshot of today’s metrics is the trend of these metrics over the last several months or year. Recognizing, as we have stated before in prior posts, that health care change is never linear, we expect some ups and downs as normal variability as we climb from the valley to the top of the mountain. However, if the trends are showing that the peaks we’ve reached on our climb are no longer in view and we are standing at a much lower level on the mountain for a prolonged period of time, we should be honest with ourselves and understanding that what we thought was hard-wired into our improvement plans was in fact extremely transient, therefore new performance plans must be devised and implemented to replace those that are not working.
Yes, it is imperative that we accept the volatility of the market as what will probably be a longer-term reality for us. But we also must accept that our mission, vision and values cannot be altered during this period of time, and that in fact we must continue to energize ourselves to maintain our Journey to Excellence as our highest priority. These times may require different approaches, different tactics and innovative methodologies to create change, and if we are successful by clearly monitoring the signs of failure and correcting them as quickly as possible, it seems reasonable to expect that reaching the top of the mountain is still extremely important and very possible.
Wednesday, October 29, 2008
Health Care's Response to the Volatility of the Markets
The never-ending fluctuations in the U.S. equity and debt markets over the last several months—which of course have been particularly intense in the last several weeks—have caused all health care leaders to pause to review their investment portfolios.
Although historically the income from investment portfolios has not been used to support operations, but rather to fund capital expenditures, the declining operating margins in U.S. health care over the last several years has changed this dependency somewhat. Therefore, the decline in the values of investment funds is not only putting capital projects at risk, but will also be affecting the operations of hospitals and health systems throughout this country.
Practically every CFO--including ours at CHRISTUS Health--thinks the changes we are seeing could never have been predicted and certainly fit into the totally “unexpected” category. This volatility clearly supports a recent projection by the American Hospital Association that approximately 1,200 hospitals in the U.S. may be forced to declare bankruptcy this fiscal year, a position that is supported by the Health Care Financial Management Association. Perhaps there is no better time in history to pause and see the advantage of being part of a larger system that began this market decline with moderate operational results and extremely strong balance sheets.
Although both have declined in recent years and months, the very size of health care systems and their accompanying balance sheets allow them able to tolerate such declines for a much longer period of time. The reality of this situation is clearly visible to CHRISTUS Health, in that three hospitals have already declared bankruptcy in several of our regions, with two already closed and the other participating in a due diligence process with us, contemplating a sale to CHRISTUS Health in the near future.
What can we do, then, in this period of time to remain focused on operations and create stability in our systems while stability, however long, is re-established in the markets? To begin, we need to take the long-term view, and--based on the history of market’s ups and downs--recognize that some time in the future the markets will re-establish themselves at an acceptable level.
However, because this time frame for stability is unknown, a health system leadership team should rethink their building projects and their capital expenditures. CHRISTUS Health prepared itself for this higher level of scrutiny two years ago by establishing a system capital allocation committee, which meets three times a year to determine how the capital will be distributed to our regions and programs in order to support their capital budgets and master building plans. With the volatility of the market, this process can be quickly controlled by determining the capital which can be safely spent and limiting the building projects to those that are already in progress and hopefully financed with bonds. All this is being done at CHRISTUS Health as we speak.
And finally, four years ago, CHRISTUS established an Investment Committee, a subcommittee of the Finance and Strategy Committee of our board, to provide outside expertise to our financial leadership team so that our portfolio is reviewed on a regular basis. During this period of time, the investment committee has been engaged at an even higher level with more frequent discussions and reviews to determine if CHRISTUS Health is doing everything possible to decrease its investment risks, including the reduction of our risk premiums on our debt obligations. One of the key responsibilities of both management and leadership is to serve as stewards of our resources. Although careful scrutiny of our operating and capital budgets is an ongoing process by management and the fiduciary overview of the system is an ongoing responsibility of the board, these extremely volatile economic times require that both scrutiny and oversight be taken to a higher level, which is characterized by more frequent conversations between leadership and governance as well as more frequent sharing of data relating to our financial and investment performance.
As we have repeatedly said, transparency is a key part of the CHRISTUS brand, and it is our commitment to complete openness and honesty that will serve us well as we continue our Journey to Excellence while creating new and different action plans to address these economic challenges.
Although historically the income from investment portfolios has not been used to support operations, but rather to fund capital expenditures, the declining operating margins in U.S. health care over the last several years has changed this dependency somewhat. Therefore, the decline in the values of investment funds is not only putting capital projects at risk, but will also be affecting the operations of hospitals and health systems throughout this country.
Practically every CFO--including ours at CHRISTUS Health--thinks the changes we are seeing could never have been predicted and certainly fit into the totally “unexpected” category. This volatility clearly supports a recent projection by the American Hospital Association that approximately 1,200 hospitals in the U.S. may be forced to declare bankruptcy this fiscal year, a position that is supported by the Health Care Financial Management Association. Perhaps there is no better time in history to pause and see the advantage of being part of a larger system that began this market decline with moderate operational results and extremely strong balance sheets.
Although both have declined in recent years and months, the very size of health care systems and their accompanying balance sheets allow them able to tolerate such declines for a much longer period of time. The reality of this situation is clearly visible to CHRISTUS Health, in that three hospitals have already declared bankruptcy in several of our regions, with two already closed and the other participating in a due diligence process with us, contemplating a sale to CHRISTUS Health in the near future.
What can we do, then, in this period of time to remain focused on operations and create stability in our systems while stability, however long, is re-established in the markets? To begin, we need to take the long-term view, and--based on the history of market’s ups and downs--recognize that some time in the future the markets will re-establish themselves at an acceptable level.
However, because this time frame for stability is unknown, a health system leadership team should rethink their building projects and their capital expenditures. CHRISTUS Health prepared itself for this higher level of scrutiny two years ago by establishing a system capital allocation committee, which meets three times a year to determine how the capital will be distributed to our regions and programs in order to support their capital budgets and master building plans. With the volatility of the market, this process can be quickly controlled by determining the capital which can be safely spent and limiting the building projects to those that are already in progress and hopefully financed with bonds. All this is being done at CHRISTUS Health as we speak.
And finally, four years ago, CHRISTUS established an Investment Committee, a subcommittee of the Finance and Strategy Committee of our board, to provide outside expertise to our financial leadership team so that our portfolio is reviewed on a regular basis. During this period of time, the investment committee has been engaged at an even higher level with more frequent discussions and reviews to determine if CHRISTUS Health is doing everything possible to decrease its investment risks, including the reduction of our risk premiums on our debt obligations. One of the key responsibilities of both management and leadership is to serve as stewards of our resources. Although careful scrutiny of our operating and capital budgets is an ongoing process by management and the fiduciary overview of the system is an ongoing responsibility of the board, these extremely volatile economic times require that both scrutiny and oversight be taken to a higher level, which is characterized by more frequent conversations between leadership and governance as well as more frequent sharing of data relating to our financial and investment performance.
As we have repeatedly said, transparency is a key part of the CHRISTUS brand, and it is our commitment to complete openness and honesty that will serve us well as we continue our Journey to Excellence while creating new and different action plans to address these economic challenges.
Wednesday, October 22, 2008
My Viewpoint
I was recently interviewed for the first edition of CEO Viewpoint, a publication produced by the Scottsdale Institute. The institute is a non-profit association that serves executive teams in leading health care systems, and they asked me to respond to a variety of questions that address many of the topics we’ve talked about here, including the challenges of the U.S. health care system today, including declining reimbursement, the volatility of the market and whether the health care industry’s toughest challenges will change under a new administration in Washington.
I thought you might be interested in reading the interview, so in lieu of a full post today, I encourage you to peruse the first edition of CEO Viewpoint, which is available here.
I thought you might be interested in reading the interview, so in lieu of a full post today, I encourage you to peruse the first edition of CEO Viewpoint, which is available here.
Wednesday, October 15, 2008
The Global Economic Crisis’ Implications for CHRISTUS Health and our Response
Because of the recent events in the global economy and the uneasiness it has caused at home, we recently provided our Associates with an update CHRISTUS Health and our ministry’s response to the global economic crisis.
The downturn in the equity markets last week has had, as we would expect, a negative impact on our portfolio. However, because of the diversification of our portfolio, the current crisis did not impact us as heavily as it did the equity markets. In the last few days, our portfolios lost 3 percent on average, while the Dow and Standard & Poor’s 500 lost approximately 9 percent each.
Obviously, for our Associates and CHRISTUS employed-physicians, the status of our retirement funds, including the Cash Balance Plan and the Matched Savings Plan, are extremely important. Since CHRISTUS Health was formed, the leadership team has made a conscious effort to ensure that the U.S. and Mexico retirement accounts are funded adequately to meet the projected needs of retirees not only for this year, but those projected to occur in future years based upon our individual ages and years of service. CHRISTUS Health has always used an external actuarial service to make the determination of what these payments in future years would be.
An actuarial is a company whose staff has the responsibility to look at the workforce, and based on its age and years of service, they determine the amount of retirement that will need to be paid out on a rolling 10-year basis. We then fund both retirement plans on a monthly basis according to the actuarial’s best estimates. Funding at the 100 percent level has been a primary goal of CHRISTUS Health. For the Cash Balance Plan, this is done through investment policies overseen by the Investment Subcommittee of the CHRISTUS Health Board of Directors. It is important to note that our Associates control the investment categories for their Matched Savings Plan.
It also should be reassuring to know that these funds are annually audited by an external auditing firm, and this report is reviewed and approved by the Audit Committee of the Board. Again, CHRISTUS Health has made an attempt to keep this retirement fund as close to 100 percent of the actuarial projections as possible and alters its monthly fund contributions in order to achieve this goal.
Obviously, with the volatility of the market, the Cash Balance Plan fund, along with the operating fund and the Emerald Assurance fund, have been affected somewhat negatively. But again, because of the diversity of our investment portfolio, the current market crisis has not as significantly affected CHRISTUS Health as it has other health systems and businesses. As the market is rebounding, it is hopeful that these losses will be partially or fully recovered quickly so as to maintain our goal of reaching 100 percent funding.
In addition, it is important to note that the retirement funds – both our Cash Balance Plan and Matched Savings Plan – are totally reserved and can never be used to support financial or operational challenges.
Because our Matched Savings Plan is an important benefit for all CHRISTUS Associates, our senior leadership team has supported our HR leaders to develop communications to encourage Associates, particularly those in the lower paid positions, to sign up for this program.
Overall, CHRISTUS Health now has nearly 30,000 Associates in our international ministry:
Full- and Part-Time Associates in the U.S. – 20,265
Per Diem Associates in the U.S. – 5,364
Mexico Associates – 3,600
In Mexico, the CHRISTUS Muguerza system is mandated by law to have a success sharing program with all their Associates. We have replicated that program on a smaller scale in the U.S. campuses, driven by patient satisfaction metrics.
In addition, in the U.S., 44.3 percent of the full- and part-time Associates contribute to the Matched Savings Plan along with 8.3 percent of the per diem Associates, resulting in an overall participation of 36.8 percent. This has grown from 8 percent over the last 10 years as CHRISTUS has continued on its Journey to Excellence.
As we review our 10-year history moving towards our 10th anniversary in February of 2009, we clearly see that CHRISTUS Health has faced many challenges. In response to these challenges, the CHRISTUS family has designed and implemented many changes which have resulted in significant progress in all of our Directions to Excellence. The market volatility we are experiencing in recent weeks is just one more challenge which we are currently addressing. We recognize that market volatility is normal and in reviewing history, we know that it must be expected periodically. To minimize the risk of this volatility both present and in the future, we rely both on our internal knowledge as well as external expertise, of our investment consultants, Investment Subcommittee, external auditors and bond rating agencies. This integrated program hopefully gives our Associates a greater sense of comfort as we travel through these challenging times.
The downturn in the equity markets last week has had, as we would expect, a negative impact on our portfolio. However, because of the diversification of our portfolio, the current crisis did not impact us as heavily as it did the equity markets. In the last few days, our portfolios lost 3 percent on average, while the Dow and Standard & Poor’s 500 lost approximately 9 percent each.
Obviously, for our Associates and CHRISTUS employed-physicians, the status of our retirement funds, including the Cash Balance Plan and the Matched Savings Plan, are extremely important. Since CHRISTUS Health was formed, the leadership team has made a conscious effort to ensure that the U.S. and Mexico retirement accounts are funded adequately to meet the projected needs of retirees not only for this year, but those projected to occur in future years based upon our individual ages and years of service. CHRISTUS Health has always used an external actuarial service to make the determination of what these payments in future years would be.
An actuarial is a company whose staff has the responsibility to look at the workforce, and based on its age and years of service, they determine the amount of retirement that will need to be paid out on a rolling 10-year basis. We then fund both retirement plans on a monthly basis according to the actuarial’s best estimates. Funding at the 100 percent level has been a primary goal of CHRISTUS Health. For the Cash Balance Plan, this is done through investment policies overseen by the Investment Subcommittee of the CHRISTUS Health Board of Directors. It is important to note that our Associates control the investment categories for their Matched Savings Plan.
It also should be reassuring to know that these funds are annually audited by an external auditing firm, and this report is reviewed and approved by the Audit Committee of the Board. Again, CHRISTUS Health has made an attempt to keep this retirement fund as close to 100 percent of the actuarial projections as possible and alters its monthly fund contributions in order to achieve this goal.
Obviously, with the volatility of the market, the Cash Balance Plan fund, along with the operating fund and the Emerald Assurance fund, have been affected somewhat negatively. But again, because of the diversity of our investment portfolio, the current market crisis has not as significantly affected CHRISTUS Health as it has other health systems and businesses. As the market is rebounding, it is hopeful that these losses will be partially or fully recovered quickly so as to maintain our goal of reaching 100 percent funding.
In addition, it is important to note that the retirement funds – both our Cash Balance Plan and Matched Savings Plan – are totally reserved and can never be used to support financial or operational challenges.
Because our Matched Savings Plan is an important benefit for all CHRISTUS Associates, our senior leadership team has supported our HR leaders to develop communications to encourage Associates, particularly those in the lower paid positions, to sign up for this program.
Overall, CHRISTUS Health now has nearly 30,000 Associates in our international ministry:
Full- and Part-Time Associates in the U.S. – 20,265
Per Diem Associates in the U.S. – 5,364
Mexico Associates – 3,600
In Mexico, the CHRISTUS Muguerza system is mandated by law to have a success sharing program with all their Associates. We have replicated that program on a smaller scale in the U.S. campuses, driven by patient satisfaction metrics.
In addition, in the U.S., 44.3 percent of the full- and part-time Associates contribute to the Matched Savings Plan along with 8.3 percent of the per diem Associates, resulting in an overall participation of 36.8 percent. This has grown from 8 percent over the last 10 years as CHRISTUS has continued on its Journey to Excellence.
As we review our 10-year history moving towards our 10th anniversary in February of 2009, we clearly see that CHRISTUS Health has faced many challenges. In response to these challenges, the CHRISTUS family has designed and implemented many changes which have resulted in significant progress in all of our Directions to Excellence. The market volatility we are experiencing in recent weeks is just one more challenge which we are currently addressing. We recognize that market volatility is normal and in reviewing history, we know that it must be expected periodically. To minimize the risk of this volatility both present and in the future, we rely both on our internal knowledge as well as external expertise, of our investment consultants, Investment Subcommittee, external auditors and bond rating agencies. This integrated program hopefully gives our Associates a greater sense of comfort as we travel through these challenging times.
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