Marketing of Health Care
WHITE PAPER
In 1997, Congress passed legislation establishing a hospital payment classification that came to be termed the “Critical Access Hospital (CAH).” The bill’s intent was to improve Medicare reimbursement for small rural hospitals so that local residents would continue to have access to acute hospital care. There are two primary requirements for CAH status: a) a rural location; and b) 25 beds or less. Today, more than 60% of rural hospitals in the U.S. are designated as Critical Access Hospitals – roughly 1,200 facilities. The states with the most CAHs are in the nation’s heartland: Texas, Kansas, Iowa, and others.
Lessons from Successful Critical Access Hospital Turnarounds
The early warning signs of financial/operational distress are markedly different for a Critical Access Hospital (CAH) than for urban and suburban hospitals. This paper examines the symptoms of distress that every CAH board member needs to recognize, along with a roadmap for a successful turnaround.
www.intensiveresourcegroup.com 888.766.2799 105 Continental Place Brentwood, TN 37207
©October 2010
Limitations of the Board
Negative Community Perception
No Strategic Plan
hospital maintains tight financial controls. They also need to carefully monitor any significant changes to the cost structure. Turning around a CAH often involves greater alignment of physician and hospital interests, especially as health reform compels greater hospital-physician integration. When a physician expresses interest in being employed or having his/her practice purchased, the board often turns to local legal counsel. Those attorneys may not have a comprehensive understanding of the compliance requirements of physician contracting – or how to attain the most favorable structures for the hospital.
Increased Competition Declining Inpatient/ Outpatient Volume
A Major Surprise
CEO Turnover
Cost Structure Changes
Cash & Cash Flow Deterioration
Staff Reduction/ Perceived Drop in
In 1997, Congress passed legislation establishing a hospital payment classification that came to be termed the “Critical Access Hospital (CAH).” The bill’s intent was to improve Medicare reimbursement for small rural hospitals so that local residents would continue to have access to acute hospital care. There are two primary requirements for CAH status: a) a rural location; and b) 25 beds or less. Today, more than 60% of rural hospitals in the U.S. are designated as Critical Access Hospitals – roughly 1,200 facilities. The states with the most CAHs are in the nation’s heartland: Texas, Kansas, Iowa, and others.
Lessons from Successful Critical Access Hospital Turnarounds
The early warning signs of financial/operational distress are markedly different for a Critical Access Hospital (CAH) than for urban and suburban hospitals. This paper examines the symptoms of distress that every CAH board member needs to recognize, along with a roadmap for a successful turnaround.
www.intensiveresourcegroup.com 888.766.2799 105 Continental Place Brentwood, TN 37207
©October 2010
Limitations of the Board
Negative Community Perception
No Strategic Plan
hospital maintains tight financial controls. They also need to carefully monitor any significant changes to the cost structure. Turning around a CAH often involves greater alignment of physician and hospital interests, especially as health reform compels greater hospital-physician integration. When a physician expresses interest in being employed or having his/her practice purchased, the board often turns to local legal counsel. Those attorneys may not have a comprehensive understanding of the compliance requirements of physician contracting – or how to attain the most favorable structures for the hospital.
Increased Competition Declining Inpatient/ Outpatient Volume
A Major Surprise
CEO Turnover
Cost Structure Changes
Cash & Cash Flow Deterioration
Staff Reduction/ Perceived Drop in
References: Consulting Case Study: Financial Improvement Process Success Story: Gritman Medical Center 3 Consulting Case Study: Group Purchasing Services 4 Success Story: Abbeville Area Medical Center 5 Success Story: Washington County Hospital 6 Success Story: Gritman Medical Center 1 2 ww.qhr.com/thought/success_stories/ www.qhr.com/thought/case study/ page 6