SSM Health Care System provides health services to people across four states (Wisconsin, Illinois, Oklahoma, and Missouri). In some cases those people face difficulty are unable to afford medical services and rely on financial assistance from SSM and the federal government to cover costs. SSM, like many hospitals, rely on the federal government through the Medicaid system and the traditional fee for services reimbursement system in which healthcare providers are reimbursed for the cost of services they provide to patients that can’t afford them by Medicaid. Recently, the Affordable Care Act of 2010 was implemented with a stated goal to change the traditional system from fee-for-service to an outcome based system (Watson, 2014). Even as these issues are occurring SSM Health Care System is forced to deal with a serious issue concerning its long term ability to provide the same level of service to residents.
Problem Statement
SSM Healthcare System, a non-profit healthcare provider, is concerned with taking care of the poor, but currently does not have adequate revenue to cover business expenses resulting in an operating loss.
Audited financial data for SSM Healthcare revealed in 2013 revealed an operating revenue shortfall of over $74 million dollars (SSM, 2014). SSM Healthcare System is the second largest healthcare system by market share in the St. Louis, Missouri area and serious consequences of a continued loss of operating revenue could include reduction or elimination of services to that community or staff layoffs at some or all of SSM’s facilities. Manager’s at SSM Health Care are faced with a dilemma of how to reduce costs associated with collecting revenue and shortening the cycle of payment in order to reduce operating loss. From the above discussion, questions about if, in an effort to reduce its operating shortfall, SSM Healthcare decided to change how it collects payments for the services it delivers present an