Hospitals Weather Storm By Positioning For Future
Recent economic figures show the current recession is not letting up. Pain has spread to all sectors, and hospitals have been no exception.
The perfect storm of 2009 has meant less access to credit, softening patient volume, and decreased state funding for distressed Medicaid programs. “Batten down the hatches” might seem like a plausible tack. But In the midst of trouble, there is a better management strategy.
Hospitals should position themselves for better days ahead. And that strategy is plotted out in the cover story of the June H&HN magazine.
Preserve Cash on Hand
A recent AHA survey showed 59 percent of all hospitals are reporting moderate to significant decreases in cash on hand. That means CEOs and CFOs must be even more vigilant in watching income statements. Money out the door means of a buffer against current challenges.
Pare Back Capital Costs
It’s a given that major capital projects have been postponed. But even smaller capital expenditures should be minimized. Cut backs are rarely popular. Officers need to be effective communicators, consistently making the frugality case to medical staff and employees.
View Future Opportunities
Administrators should think about the right way to grow service lines. The key is recruiting clinicians for existing services, thus negating the need for expensive capital outlays. It helps that private physicians are weathering their own crises with their own private practices. In fact, a recent healthcare employment trend has shown a rising doctor preference for hospital employment.
Revisit Strategic Plan
Any plan will have to adjust for the ongoing effects of the nation’s credit crisis. To be sure, tough decisions can’t be avoided. But tough decisions today means some hospitals will emerge from the credit crisis of 2009 in an even stronger position.
Which of these – or other strategies is your organization implementing or considering?
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