Provider services and solutions

Financial performance: Financial effectiveness and turnaround

The challenge

Scarce capital. Tight credit. Expensive borrowing-when banks are willing or able to lend. The declining value of investment portfolios. These recession woes may improve over the long-term for the capital-intensive healthcare industry, but broader economic threats will likely endure, including:

• Relentless competition
• More uninsured patients
• More uncompensated care
• Outcome-based Medicare reimbursements
• Cash-strapped states cutting funding for safety net hospitals and Medicaid programs
• Payers and patients less willing-and less able-to pay the actual cost of care

As a result, for-profit hospitals are operating on dangerously thin margins. Not-for-profit hospitals have fewer cash reserves. Many providers are too busy struggling to keep their doors open to think and act strategically. Many providers may be in technical default on their long-term debt, requiring outside intervention such as the appointment of a chief restructuring officer or the development of a turnaround plan.

To survive the current economic downturn, you need to take a long-term approach. Align your resources, services offerings, and operational strategies with your organization’s mission and vision. You need to improve your operational efficiency, but that alone will not redirect your organization toward sustainable profitability. You must extract the maximum benefit from every dollar you spend, but you must also spend less. You cannot stay trapped in the crisis mentality of the present. Think strategically. Carefully examine the market for trends and opportunities. Analyze the strengths and weaknesses of your competitors. Use these analyses to guide service line development.

How we can help you

• You need to move beyond crisis management to position your organization for growth.
  • We can help you develop financially driven strategic plans that balance your organization’s mission and vision, resources and financial performance. We identify short-term cash wins to buy you time to invest in your future. We help you meet the reporting requirements your creditors may have placed on you.
• You need to make sure you are paid correctly for the services you provide.
  • We can help you increase the accuracy of your reimbursement through more accurate coding and clinical documentation. We can assess and improve your revenue cycle operations. We can find opportunities to improve third-party reimbursement and position you to fare better during managed care negotiations.
• You need to make the dollars you spend count.
  • We can identify operating savings opportunities, and improve operational efficiency. We can help you make business decisions about the services you provide. We can help you design effective internal controls and real-time monitoring of performance.
• A troubled economy and competitive marketplace can create opportunities as well as challenges.
  • We can analyze market trends, community needs and competitors’ capabilities to help you develop profitable service lines. We can help you use your existing facilities more efficiently and plan new facilities to generate more profit.

Common services include

• Strategic, business and turnaround plan development
• Market analysis
• Partnering or divestiture support
• Medical enterprise strategy and operations
• Coding and documentation accuracy and completeness
• Regulated and negotiated payment support
• Revenue cycle operations improvement
• Effectiveness and efficiency of financial operations
• Enhancement of systems
• Improving efficiency of operations and care delivery
• Savings on the full range of labor and non-labor costs
• Aligning IT investments and spending to business needs
• Developing and revamping service offerings