Managing Costs and Innovation with CPM

• Date: 01 September 2014
• Published date: 01 September 2014
• Author: Bob Paladino
• DOI: http://doi.org/10.1002/jcaf.21989

55

© 2014 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI 10.1002/jcaf.21989

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Bob Paladino

How do successful companies organize and inno-

vate to achieve results—especially in a challeng-

ing market? The author explains how Corporate

Performance Management (CPM) can improve

performance by managing costs and innovation.

This article shows how the traditional corporate

finance function can become a forward-looking,

value-creating driver of innovation, earnings, and

success. © 2014 Wiley Periodicals, Inc.

M anaging Costs and Innovation

with CPM

This article explains

how the shared-

services finance

function of MidMichi-

gan Health’s (Mid-

Michigan) Finance’s

Corporate Performance

Management (CPM)

function helped bring

about “step function”

improvements. These

improvements occur

by creating millions

in recurring earn-

ings improvements, enhancing

patient care, improving inter-

nal customer satisfaction, and

augmenting key support and

core processes.

1 Finance, with

its unique vantage point, has

facilitated deployment of CPM

methods throughout the organi-

zation. This article will focus on

managing innovation through

the new products team.

MIDMICHIGAN HEALTH’S CPM

PROGRAM

MidMichigan Health has

more than 4,800 employees,

physicians, and volunteers and

provided $76.7 million in com-

munity benefits (unbilled ser-

vices) in fiscal year 2011. It is a

partnership of health providers,

services, and facilities—a non-

profit, tax-exempt organization

led by a board of directors and

a 145-person corporate mem-

bership. All excess revenues

go back into providing care;

upgrading services, technology,

and facilities; fairly compensat-

ing employees; and creating a

supportive work environment.

MidMichigan

Health acts as a par-

ent organization to

14 subsidiaries and

has various joint

ventures and man-

agement contracts.

System-wide, Mid-

Michigan Health

has:

450 physicians • and advanced

practice provid-

ers, and more than 1,250

volunteers.

Annual gross revenues of • about $1.1 billion, payrolls

of $100 million and assets

valued at more than $590

million.

461 hospital beds at four • medical centers, 185

licensed nursing home beds,

and 20 licensed assisted liv-

ing beds.

KEY MARKET AND INDUSTRY

TRENDS

A full discussion about

trends in health care could

consume volumes. This section

This article is an excerpt from the

author’s book, Corporate Performance

Management Best Practices: A Case

Study Approach to Accelerating CPM

Results, Copyright © 2013, Bob

Paladino. Published by John Wiley &

Sons, Inc.