Regional West Medical Center

A Case Study in Outreach Program Development

Situation

Established by the Northwest Conference of the Methodist Church as a non-profit general hospital, Regional West Medical Center (Regional West) opened its doors on April 5, 1924, admitting its first patients to a 60-bed facility. In 1967, the hospital moved to its current location at 4021 Avenue B and expanded to 117 beds. In 1977, Regional West acquired St. Mary’s Hospital, increasing the number of hospital beds to 279. Today, the two combined facilities serve an eleven-county area in Western Nebraska and a two-county area in eastern Wyoming.

In 1997, Chi Solutions, Inc. (Chi), contracted with Regional West to provide services to begin an extensive outreach program. Previous to this, Regional West had a very limited outreach program. The decision to move ahead was motivated by an analysis provided by Chi that confirmed there was a substantial market opportunity. With the go-ahead of Regional West Management and the assistance of Chi, the laboratory launched the outreach program. The process involved developing a new price structure, hiring a sales representative, producing new marketing materials to promote its services and establishing a courier network covering four states. To meet growing demand, regional hubs were set up in locations in Wyoming and Denver, Colorado. A second representative and a service representative have been added to facilitate additional growth and meet increasing service demands.

Strategy

  • To provide state-of-the-art services to clients through consistent upgrading of the service menu by the outside sales force.
  • Expand geographically to large population centers in Nebraska (Omaha and Lincoln), South Dakota (Rapid City) and development of the north western sector of Colorado.
  • Continue to maintain contractual relations with key managed care providers.
  • Bring in-house high volume procedures that are currently being referred out. This will reducecost and improve turnaround time.
  • Consistent field and formal training of the sales force to maintain sales skills at a high level.
  • Continue to emphasize electronic transfer of data for both results and test ordering.

Challenge

  • Providing extensive courier routes to cover large geographic areas.
  • Committed to a strategy to contract with key managed care carriers.
  • Developing new territories and creating differential to succeed in those markets.

Results

Growth and Profitability:
  • The outreach program has grown from $.5M to $11M.
  • Annual billable procedures have grown to 550,000.
  • Net contribution averages 35%.

Figure 1:  Net Contribution
Net Contribution

Sales:
  • Field sales force includes two sales representatives and one field service representative.
  • Expanding services to Eastern Nebraska and Western Iowa.

Figure 2:  Outreach Program’s Geographic Coverage Primary and Secondary Markets
Primary and Secondary Market Map.png
Primary and Secondary Market Legend

Operations:
  • Contracted with a large hospital laboratory purchasing group to secure additional managed care coverage.
  • Developed resources to interface with physician EMR systems.
  • Successfully initiated the Horizon web-based order entry system.
  • Established successfully several patient service centers with STAT testing capability in hubs throughout three states.

Value

  • Developed a commercial laboratory environment throughout the laboratory operation.
  • Introduced and implemented pricing and logistics strategy that provided value added service to physician clients.
  • Developed contribution analysis guidelines that financially qualified clients for additional ancillary services (phlebotomy placement, interface installation, web-based order entry, STAT testing in physician offices).
  • Sales success in the field has developed an attitude throughout the organization that outreach laboratory services provided by Regional West can be competitive with the national laboratories without compromising quality and profitability.