As a hospital board member, how do you know if your hospital is becoming distressed? Here’s a quick list of ten warning signs.
- The hospital’s financial situation is deteriorating – declines in earnings and cash flow, increases in accounts receivable and accounts payable, and reduced net revenues.
- Patient volumes and market share are decreasing but expenses are not being reduced accordingly.
- Key medical staff leaders begin to defect.
- Poor decisions are being made resulting in investment in new or risky ventures which have not been proven feasible and are not a part of the core mission; questionable business arrangements are made in physician contracts and owned practices.
- Administrative overhead is high; decisions are delayed in layers of red tape. Senior leadership spends the majority of its time in unproductive meetings.
- Managers do not have a handle on operations, are inaccessible and delegate excessively, with little follow-up or mentoring of subordinates.
- There is excessive dependence on consultants, and the same ones are used over and over.
- Financial reporting is weak, including statements which are untimely, lack important detail or are too voluminous to be useful. External audit contains surprises or fails to identify major financial issues, account analyses are delinquent, and basic financial controls are lacking.
- Information systems to monitor program profitability and managed care contract performance are inadequate.
- Not enough attention is paid to monitoring quality and medical staff discipline is ineffective.
If your hospital is experiencing some of these signs of distress, don’t wait until it is too late. Call Peter J. Betts at 941-358-6131 or send an email to peter@peterjbetts.com.