Strategies for Healthy Finances Don Pursley, Col Ret. USAFA, BSE, MS, DBA The speaker does not have any relevant financial relationships with any commercial interests

Blantyre Adventist Hospital

How They Did It Right sizing the staff. Recognition of where the business comes from. Adjusting the tariffs. Watch surgeries and occupancies.

Strategies Different Laws. Different Cultures. Different Situations. All have been used in hospitals.

10 WAYS TO IMPROVE YOUR FINANCES Contract Compliance Special Service Lines Lure The Physician Donations Watch Inflation

10 WAYS TO IMPROVE YOUR FINANCES Right Size The Organization Use Flex Staffing Control Overtime Manage Supplies/Medicines Fewer Might Be Better

Strategy #1 Contract Compliance

Contract Compliance “The provider may bill against this contract for the following: (See appendix A for rates) 1: Physician services 2: Hospital bed usage 3: Medicines given 4: Meals given to the patient 5: Supplies used in treatment 6: Auxiliary services”

Contract Compliance THE BILL Physician Services Hospital Bed (5 nights) Medicines given to the Patient Meals Laboratory Total Total

Medical Supplies???

Contract Compliance “The provider may bill against this contract for the following: (See appendix A for rates) 1: Physician services 2: Hospital bed usage 3: Medicines given 4: Meals given to the patient 5: Supplies used in treatment 6: Auxiliary services”

Contract Compliance THE BILL Physician Services Hospital Bed (5 nights) Medicines given to the Patient Meals Laboratory Total Total

Contract Compliance Must list the type and quantity of medicines given. Must List the specific laboratory test given. The physician must submit with the bill the medical summaries. Bills must be submitted within 90 days of the dismissal. Readmission for the same medical problem within 30 days of dismissal is not covered by this contract.

Strategy #2 Special Service Lines

Special Service Lines

China Manufacturing Assembly Worker $11,500Architect$28,470 General Manager $132,801

Zambia Accountant$11,700 Finance Manager $48,000 Country Manager $54,000

Botswana Physician$33,600Accountant$4,372-$88,769 Civil Engineer $142,031

Nigeria Accountant$16,000 Mechanical Engineer $32,522CEO$165,000

Executive Physicals  Blood Work  Stress Test  Colonoscopy  General Physical  Life Style Counseling  Diet Counseling

Strategy # 3 Lure The Physician

Who decides which hospital a patient will go to for a procedure?

Strategy # 4 Donations Donations To Nonprofit Organizations In 2013 $ Billion 72% Is Given By Individuals

Donations “We are a Hospital in need please send money”

Donations Information About The Hospital A Case Statement Thank You Constant Communication

Strategy # 5 Watch Inflation Chad %Nigeria %Cameroon %Ghana %Gabon % Cote D’ivore %

Strategy # 5 Watch Inflation Angola %Malawi %Mozambique %Zambabwe %Madagascar % South Africa % Tanzania %Zambia %Kenya %Namibia %

Effects Of Inflation Over Time Inflation3%3%3%3% Income Expenses Profit/(loss) Profit Margin 4.76%1.9%-1.04%-4.07%-7.19%

Strategy # 6 Right Size The Organization How many staff do you need in each department?

WHERE ARE THE EXPENSES?

WHAT ARE THESE CHARTS TELLING US?

RIGHT SIZE THE ORGANIZATION 1. EXTERNAL BENCHMARKS a. COMMERCIAL DATA a. COMMERCIAL DATA b. STATE GUIDELINES b. STATE GUIDELINES c. FEDEREAL GUIDELINES c. FEDEREAL GUIDELINES 2. INTERNAL BENCHMARKS 2. INTERNAL BENCHMARKS

Cost/Saving of Right Sizing Hospital is over staffed by 20 employees. Average annual salary and benefits of the 20 employees is $9,000. ( $180,000) The cost to terminate by law is 3 months salary and benefits. ($45,000) Payable upon termination.

Savings From Right Sizing Spend $45,000 save $180,000 per year. Where do we get the $45,000? Do the math and borrow the money.

Strategy # 7 Flex Staffing

What Nursing Staff Do You Need? Patients Number Of Nurses

How Do You Deal With This?

Use Flex Staffing  Send employees home.  Use an on-call system.  Use an employee contracting agency.  Have part-time employees who can be called.

Strategy # 8 Control Overtime About 10% of a provider’s labor budget Labor 63% of your costs No overtime would save about 6% Labor $500,000 per year-save $30,000

Control Overtime Have clear policies and procedures Who can approve overtime Set goals Track overtime and compare with goals

Strategy # 9 Manage Supplies/Medicines 22% of expenses Who is making the decisions on supply and medicine usage?

Manage Supplies/Medicines Inventory control –Stealing –Outdated –Too Much and Too Little Gain sharing –Who is making the decision on usage? –Give an incentive for efficiencies

Strategy # 10 Fewer Might Be Better 1. Is your hospital’s quality down because of unmotivated and unresponsive staff? 1. Is your hospital’s quality down because of unmotivated and unresponsive staff? 2. Are the staff in the hospital rude to the patients? 3. Is the morale in the hospital down because of some disgruntled staff? 4. Are you losing money because patients and doctors do not want to use the hospital because of 1, 2, and 3 above?

Fewer Might Be Better “It is far easier to allow matters in our important institutions to go in a lax, loose way than to weed out that which is offensive, which will corrupt and destroy confidence and faith. But it would be far better to have a smaller number of workers, to accomplish less, and as far as possible to have these who are engaged in the work truehearted, firm as rock in principle, loving the whole truth, obedient to all the commandments of God” Counsels On Health Page 264

10 WAYS TO IMPROVE YOUR FINANCES Contract Compliance Special Service Lines Lure The Physician Donations Watch Inflation

10 WAYS TO IMPROVE YOUR FINANCES Right Size The Organization Use Flex Staffing Control Overtime Manage Supplies/Medicines Fewer Might Be Better