Frequently Asked Questions

What hospital consulting services does CHC offer?

CHC Consulting offers a range of customizable hospital consulting services that help improve patient satisfaction, clinical outcomes and financial performance. CHC Consulting helps hospitals in several key areas: financial improvement, operational improvement, supply chain services (through CHC Supply Trust), hospital turnaround services, regulatory compliance, strategic vision, and LTACH and post acute services (through CHC ContinueCARE). CHC also offers partnering options including hospital management services and hospital ownership models. For a complete list of services and more information, see our Services page.

What is the first step to a hospital consulting engagement?

The first step is a comprehensive operational assessment that includes a thorough review of operations and an actionable plan for improvement. The operational assessment process examines several key areas: strategy, operations, staffing productivity, supply chain, revenue cycle, finance, medical staff, and leadership.

The process detects challenges and opportunities in each area so they can be addressed as part of a step-by-step hospital performance enhancement plan.

What are important metrics for community hospital financial performance?

Five key metrics to monitor include aggregate volume and provider utilization trends; operating ratios, including expenses as a percentage of net operating revenue focusing on labor, supplies, and purchased services; labor costs relative to volumes, including full-time equivalent staffing per adjusted occupied bed targets; patient revenue indicators including bad debt percentage and net to gross percentage by payer class; and liquidity ratios, such as net days in patient accounts receivable and cash collections as a percentage of net revenue minus bad debts. Subpar performance in any of these areas indicates a need for hospital operations improvement. CHC uses proven processes to optimize these metrics and reverse financial and operational declines at community hospitals. 

What does a community hospital operational assessment involve?

The operational assessment process encompasses the review and assessment of strategy, operations, staffing, supply chain, revenue cycle, finance, medical staff issues and facility leadership. The process begins with an extensive review of data and documents, coupled with one-on-one interviews with hospital board trustees, the management team, department directors, and the medical staff. The operational assessment involves processes that detect challenges, uncover the root cause for those challenges, and identify a plan to make improvements. Regardless of whether a medical facility is in distress or operating well, the assessment and action plan lead to healthcare operations improvement and enhanced performance. 

Why is strategic planning important for community hospitals?

Strategic planning is the process of envisioning where the hospital sees itself in the long term and setting goals to get there. A strategic plan establishes a common vision among hospital leaders, board members, physicians and other stakeholders, and empowers people to make proactive decisions that align with the vision and yield sustainable results instead of reacting to circumstances as they arise. A strategic plan provides a framework for setting priorities and allocating resources in alignment with the strategic vision. In today’s ever-changing healthcare climate, strategic planning gives hospitals a greater measure of security and flexibility to manage change. For hospitals that need help clarifying their objectives and determining how to meet them, CHC Consulting offers strategic vision development and business planning services.    

What are signs my hospital is headed for financial distress?

Signs a hospital is headed for or already in financial distress include obvious indicators such as declining revenue, a dip in patient volume, or a bond violation or drop in bond rating. High operating ratios are another clear sign and include labor costs relative to volumes, as well as expenses (labor, supplies, purchased services) as a percentage of net operating revenue. Other signs include low days cash on hand (less than 60); a shaky market position; and medical staff dissatisfaction or defection. These distress signals indicate a need for hospital operations improvement or a guided turnaround

What does a guided hospital turnaround entail?

Although every turnaround situation is different, the process typically starts with an operational assessment of several key areas that impact hospital performance, including staff productivity, supply chain and revenue cycle. This evaluation includes an extensive review of data and documents, as well as one-on-one interviews with board, executive and physician leaders to provide a full understanding of existing business issues. The evaluation brings to light any organizational vulnerability that isn’t immediately apparent and provides the basis for a turnaround program, including a detailed action plan and implementation support.

What are tips to improve hospital board performance?

Have a structured orientation program in place for new members, and then offer ongoing board education. Clarify in writing the board’s roles and responsibilities, as blurring the line between governance and management is a common cause of board dysfunction. Conduct formal board self-assessments at least every two to three years, as well as a board chair evaluation six months to a year before term expiration. Help board members prepare for meetings by providing them with the agenda and topic reports at least a week in advance. CHC Consulting offers hospital board advisory services to improve board performance. 

What are unique community hospital supply chain management considerations?

Historically, community hospitals are hit the hardest by supply costs because they don’t wield the purchasing power of larger facilities and systems.  In many cases Group Purchasing Organizations (GPOs) only offer the lowest costs to hospitals that purchase the largest volumes. It is important to find a Supply Chain partner that offers the best pricing to all hospitals regardless of their size or annual spend.

Can CHC help my hospital with supply chain efficiencies?

Yes, through CHC Supply Trust, CHC offers comprehensive supply chain support services including GPO membership. Our experts take time to access your hospital’s procurement process to get rid of inefficiencies and unnecessary costs. We can assist with inventory optimization, contract negotiation and the full range of supply chain logistics. For more information, visit our CHC Supply Chain Management page

How much money can CHC’s GPO save my hospital?

CHC Supply Trust (CHC’s GPO tailor-made for community hospitals) typically saves client hospitals about 10 percent annually. A free supply spend analysis shows how much your hospital can save as a CHC Supply Trust member on items you already purchase. 

What types of partnership options are available to my hospital?

Your hospital can enter into an affiliation with a larger entity and maintain local control while leveraging the larger organization’s purchasing power and using its facilities and physicians. A clinical affiliation is a specific level of affiliation that gives a smaller facility access to specialists in exchange for transferring complex cases within those specialties to the larger organization. Another option is a management relationship that allows your hospital to maintain governance while abdicating day-to-day management responsibility to a third party. Lastly, there are mergers and acquisitions. A merger of equals occurs when the parties combine assets to form a new company. Mergers also take place that grant a lesser ownership stake to the party that brings less to the partnership. An acquisition results in ownership, not partnership, and entails selling all assets to the buyer who assumes responsibility for the hospital’s performance. CHC offers partnering options including hospital management services and hospital ownership models.  

Can we partner with another organization and maintain local control and governance?

It is possible to enter into a partnership and maintain local control and governance—for example, with an affiliation agreement that transfers neither risk nor governance; a management relationship in which the hospital remains self-governing but abdicates day-to-day management responsibility to a third party; or a corporate member substitution whereby a larger entity becomes the corporate member of a privately held, not-for-profit hospital. Generally speaking, the more money you want the other organization to risk on your behalf, the less power and control you get to keep. CHC offers management relationships with hospitals in which CHC manages day-to-day operations and works with the board on strategic vision, while enabling the hospital to self-govern. 

Can bankruptcy be a path to hospital sustainability? 

In some cases, financially distressed hospitals can leverage bankruptcy to get the legal protection and time needed to develop a plan to restructure debt, pay creditors and keep the doors open for the foreseeable future. Though not the right move for every hospital facing financial challenges, bankruptcy clears the books of some expenses and can give a hospital a fresh start and solid footing for the future. Read a case study of one hospital’s experience emerging from Chapter 9 bankruptcy.

How can hospital boards identify and evaluate potential partners?

First, take stock of your hospital’s strengths and weaknesses to determine the resources and support required of a partner. Use a request for proposal (RFP) process to seek partners that provide the needed resources and also have a shared mission and compatible culture. Besides needed resources, consider the potential benefits a partnership might offer, such as better geographic coverage, improved clinical integration, improved care-delivery efficiency, expanded services and enhanced clinical talent. 

Can CHC help my hospital strengthen its cyber security defenses?

Yes, CHC Consulting helps hospitals strengthen their cyber security defenses a number of ways: educating employees about secure computing; protecting sensitive data; installing breach-detection tools; and preparing for—and responding to—a security breach. For more information about cyber security, read our blog post, “Strengthening Cyber Security in Four Steps.”  

Can CHC help my hospital restructure debt?

Yes, CHC helps hospitals restructure debt and leverage bankruptcy with an eye toward clearing a path to a sustainable future. Though not the right move for every hospital in financial distress, bankruptcy clears the books of some expenses and can give a hospital a fresh start and solid footing for the future. 

What are quality performance metrics for community hospitals?

The quality metrics most acute care community hospitals track are guided by Centers for Medicare and Medicaid Services (CMS). Each year, CMS determines metrics that must be reported for inpatient, outpatient and ambulatory surgery centers or other specialty services the organization might provide, as well as Promoting Interoperability Programs requirements. There are many additional metrics beyond the CMS-required metrics, which are typically guided by other organizations such as state agencies, accrediting organizations, health plans, quality improvement organizations (QIOs) or rural health organizations.  CHC hospitals monitor operational, structure, process and outcome measures including readmission rates, mortality rates, hospital acquired conditions and customer experience.

How can community hospitals improve patient care quality?

Begin with measuring baselines. It is important to know how your organization is performing before you can determine where to dedicate resources. Goals for achievement should be based on national benchmarks or improvement over self. The next step is tracking metrics to achieve hospital goals. Quality interventions should be evidence-based and focused on improving patient care and defined metrics. Communicating the metrics and targets to all staff and providers is critical for driving improvement and tracking progress.

How can my hospital maintain hospital patient care quality while cutting costs?

Quality is not only a clinical structural support of a healthcare organization but a financial one, as well. The success of any healthcare organization depends on the organization’s ability to reduce cost, improve the patient experience, produce better patient outcomes and enhance clinician experience. Some examples of quality initiatives that reduce cost and improve revenue include reducing length of stay; improving case mix index; decreasing readmissions; reducing mortality; improving patient outcomes; reducing the amount of resources used to treat co-morbid conditions; and impacting the patient experience in a favorable way.