2012 Critical Access Hospital (CAH) Financial Leadership Summit

Transcription

1 600 East Superior Street, Suite 404 I Duluth, MN I Ph or I Critical Access Hospital (CAH) Financial Leadership Summit Terry Hill Executive Director July 2012

2 Purpose The National Rural Health Resource Center is a nonprofit organization dedicated to sustaining and improving health care in rural communities. As the nation s leading technical assistance and knowledge center in rural health, The Center focuses on five core areas: Performance Improvement Health Information Technology Recruitment & Retention Community Health Assessments Networking

3 Summit Participants Eide Bailly (Consulting) Stroudwater (Consulting) BKD (Consulting) Wipfli (Consulting) McClure and Associates, Inc. Mountain States Group Louisiana Hospital Utah Hospital Association Association Georgia State Office of Rural Health National Rural Health Resource Center HRSA Office of Rural Health Policy Rural Health Research Center, Univ. of North Carolina

4 Top 10 Financial Strength Indicators 1. Days of gross revenue in gross accounts receivable 2. Days of net revenue in net accounts receivable 3. Days cash on hand (all sources including non-restricted) 4. Total margin 5. Operating margin

5 Top 10 Financial Strength Indicators 6. Personnel expense as a percentage of operating revenue 7. Payor mix 8. Average age of plant 9. Long-term debt to capitalization (important to lenders) 10.Debt service coverage ratio (important to lenders)

6 CAH Financial Interventions 1. Revenue cycle management (RCM) Chargemaster/revenue cycle review Pricing review Charge capture/coding review Self pay collection process Front end process Denial management Management establishment of key performance indicators

7 CAH Financial Interventions RCM Value Bottom line financial improvement Enhanced liquidity Improved processes hospital wide 2. Strategic, financial, and operational assessments Benchmarks Market analyses

8 CAH Financial Interventions 3. Cost report reviews and strategies Great opportunities for funds A second review is beneficial Monthly review (settle up tool) - low cost 4. Physician practice management assessments Often loses money Understanding tolerable loss Major opportunities for efficiencies Need to manage relative value units and changes

9 CAH Financial Interventions 5. Lean training Business office Department managers 6. Education CAH board CAH department managers CFOs

10 CAH Challenges in a New Healthcare Market Volume to value transition Reform models (accountable care organizations, medical homes, and bundled payments) Pay for quality Reduced payments Electronic medical records meaningful use More demanding public Access to needed expertise Recruiting and retaining providers

11 CAH Challenges in a New Healthcare Market Increase leadership awareness of new environment realities and CAH/primary care provider value Improve operational efficiency Adapt effective quality measurement and improvement systems as a strategic priority Report publicly to Hospital Compare and HCAHPS

12 CAH Strategies in a New Healthcare Market Align/partner with medical staff members contractually, functionally, and through governance Seek interdependent relationships with developing regional systems Maintain alignment between delivery system models and payment systems

13 CAH Strategies in a New Healthcare Market Network to gain access to collective volume discounts, expertise, new business opportunities, grants, education, and clout Engage and market to employers and the community

14 Even if you re on the right track, you ll get run over if you just sit there. -Will Rogers

15 Terry Hill Executive Director National Rural Health Resource Center 600 East Superior Street, Suite 404 Duluth, MN (218) ext. 232