Schaefer rehabilitates the bottom line at HealthSouth

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HealthSouth Rehabilitation Hospital CEO Steven Schaefer has made some big changes in his two-year tenure. The hospital was losing money and was going to be closed by its parent company before he arrived. Schaefer reorganized matters, a move that included layoffs and, less dramatically but just as effectively, changes to billing. The 43-bed hospital is now operating in the black. The turnaround has been so dramatic, Schaefer recently decided he could afford to renovate the lobby.

How will the national healthcare reforms affect the way you do business?

Reform came to the rehabilitation side of health care in 2006, and the industry changed overnight. CMS (the Centers for Medicare and Medicaid Services) decided that rehab hospitals were charging too much money. The solution was to limit the types of patients in a rehab hospital to 13 diagnoses, and to make the focus on orthopedic, cardiac and brain issues. Other patients would go to a lesser level of care. For us, that meant we went from operating very close to the hospital’s capacity to having only 10 patients. It was a dramatic shift. We’ve figured it out now, and we’re working within the parameters.

Overall, I view health care reform as a great hope. The system is going to be more transparent, there are going to be information put out about quality indicators, and it’s going to allow us to tell a better story of what we do here.

How busy is the hospital now?

We keep about 20 to 30 patients here at any give point. The numbers are up, but we still have some work to do. One thing about current reform is that hospitals will be penalized for patients who return to the hospital after being released. We have an 80 percent rate of sending patients home after their stay here, so we’ll have to work to make sure they are ready — or send them to a lower-level of care, like a nursing home.

What are the challenges that lie ahead for you?

One of the big ones is telling people what we do here. When I considered taking this job, after 11 years at Memorial Health System, I asked around about the hospital. One of the big things was people just don’t know what we do here — what services we provide. We’re the best-kept, health-care secret in Colorado Springs. The other thing is to make it easier for doctors to use our services. That was the other thing I kept hearing: doctors liked what we provide, but it was too difficult to get their patients enrolled here. We’ve streamlined that process, and made it easier for the patients to come here after a stay in the hospital. We have a tremendous focus on customer service now. We’re working on electronic health records, which will be able to be linked with the doctors in town.

What’s next for the hospital?

I have some pretty ambitious plans in the works. We have an entire wing that is used for storage now, that I’d like to turn into a wellness center for people with disabilities or mobility issues. We’d have a variety of classes that would be disease-specific — people with MS (multiple sclerosis), diabetes, developmentally disabled. It would give them some place to call home, some place they could exercise, where they could feel comfortable, instead of going to a gym. So many places aren’t suitable for people with disabilities, yet they need the exercise too.

Audio excerpt of the interview with Steve Schaefer.