Community hospitals across the country continue to struggle. In 2020, coronavirus-related federal stimulus money gave many a temporary financial lifeline. Now those funds are depleted, and hospitals are facing additional challenges ahead. Hospital performance turnarounds are needed now more than ever to help improve patient volumes and revenues impacted by the pandemic.
The primary objective of any hospital is to improve the quality of patients’ lives by providing quality healthcare services. However, the reality of running a community hospital is challenging in today’s environment. Both administration and staff must continuously address all financial and operational performance problems to ensure positive results for short-term success and long-term sustainability. With the community and rural hospital environment becoming more challenging by the day, the sustainability of a good number of hospitals is in jeopardy. As such, it is necessary to determine strategies that will help address sustainability challenges at the present, and in the future.
When community hospitals face dwindling cash reserves and declining patient volume, CHC Consulting turnaround strategists step in to review current operations and identify opportunities for cost reduction and revenue enhancement. The first step is recognizing that problems need to be addressed and that outside assistance may be needed. Our initiatives help to correct dwindling cash reserves and declining patient volume. These efforts go a long way in helping to maintain the quality of healthcare in communities across the United States.
Community hospitals across the country are facing operational challenges. This white paper outlines critical steps to turn around your hospital’s performance.
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When Southwest Health System (SHS), in Cortez, Colorado, contacted Community Hospital Corporation (CHC) early in 2018, the hospital had violated various bond covenants associated with its $30 million expansion and renovation project. In fact, the organization had failed to meet the 80 days-cash-on-hand requirements for four consecutive quarters. This violation triggered technical default, which could have led to hospital bankruptcy and closure.
Lenders concerned with the financial situation communicated with the board directly and required an outside consulting firm to evaluate the situation and develop a plan...
Ailing hospitals that struggle with financial and operational performance problems must find ways of balancing cost reduction and revenue enhancement. This balancing should be done in a way that addresses the negative cash flow situation without compromising patient safety and satisfaction concerns. However, since no two situations are exactly alike, it is critically important for management to begin by recognizing the existence of problems, accept that external assistance may be needed, and identify the cause of these problems. CHC’s customized turnaround services help to address a wide array of crises, so that the hospital can take quick and corrective measures.
Apart from bottom-line results, CHC also focuses on the hospital’s employees, patients, and the surrounding community that depend heavily on the continued success of the facility. If a clinic is unable to address financial and performance problems on its own, it becomes a candidate for a guided turnaround. For many hospitals in this situation, CHC comes in to help. We collaborate and work with community hospitals of all sizes, ensuring that the tailored approach we adopt is based on the hospital?s needs, and tactics and strategies with demonstrable success. We begin with an operational assessment that helps us to understand existing business processes and reveals the vulnerability of the organization. Based on the findings of the operational assessment, we develop a detailed action plan.
In working with community hospitals, we have seen patterns that increase the chances of recovery and success. One key component is the hospital must have a well-functioning board. We often recommend infusing the hospital board with diversity to bring a breath of fresh air that can inject needed change. Another step we often recommend is tackling board member conflicts of interest that could otherwise hinder any attempt at a turnaround. We also insist that hospitals recruit individuals with a deep understanding of healthcare and some level of governance education. Depending on the situation at hand, it may even be necessary for the board to select a new CEO.
To identify what is ailing a hospital and recommend suitable solutions to address the problems, we will need to conduct an operational assessment. This involves examining and reviewing the strategy, staffing, operations, revenue cycle, provision chain, medical staff issues, and facility leadership. Operational assessments make it possible for us to understand how the hospital is currently running; and ways it could be improved.
Turnaround services also includes identifying opportunities toward keeping the chargemaster code compliant and competitively priced. Medical records coding as well as the charge description master (CDM), or chargemaster, codes should be reviewed regularly to identify and correct any potential issues and ensure codes are current and being utilized appropriately. Our experts know the revenue cycle is a complex function and search for all points that may be broken.
With the continual fiscal pressures from governmental reimbursement programs, the need to have positive relationships with commercial health plans is oftentimes essential to providing a positive margin from operations. We look at and review health plan contracts to ensure that the plan contracts are functioning as intended. By comparing each contract to the chargemaster, we can determine whether the hospital is collecting an appropriate amount from each payer. Depending on the situation, some of these contracts may need to be renegotiated or chargemaster updated to protect the interests of the hospital.
Historically, community hospitals are hit the hardest by provision costs because many don?t wield the purchasing power of larger facilities and systems, but with the support and guidance of CHC Supply Trust, community hospitals can achieve the same preferred pricing typically reserved for their larger counterparts.
The management of labor in the hospital environment is a process that truly requires day-to-day oversight by the hospital leadership team. Salary, wages and benefits are the most significant operating expenses for a hospital trying to improve financial performance. CHC Consulting’s approach for productivity, customized for rural and community hospitals, brings just what?s needed to make staffing effective for quality care delivery.
When it comes to receiving payment for services rendered, hospitals face declining reimbursement rates, which mean hospitals collect only a fraction of what is due. Second, higher health insurance deductibles shift payment responsibility to consumers who may not be able to pay, which in turn forces hospitals to write off more unpaid bills. These ongoing challenges make it critically important for hospitals to identify, monitor and collect each and every dollar they are due. The good news: optimizing revenue cycle processes end-to-end can deliver bottom-line results.
By updating and enhancing the use of technology in various processes, hospitals can improve patient safety, optimize staff productivity, reduce medical errors, improve the quality of health care delivery, and enjoy better interaction with patients. Our approach also keeps the cost of advanced technology as low as possible.
Leaders of ailing hospitals usually realize there’s room for improvement but often don’t recognize the severity of their situation until it’s too late. It is often external stakeholders or bondholders who set corrective action in motion by seeking outside assistance. That’s when Community Hospital Corporation (CHC) steps in with an intensive recovery plan.
CHC’s turnaround plans help ailing hospitals when financial and performance problems threaten their livelihood and, often, their existence. We develop and help implement a guided turnaround process based on a tried-and-true blueprint that we customize for each...
