1. 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

2. Blantyre Adventist Hospital

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

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

5. 10 WAYS TO IMPROVE YOUR FINANCES Contract Compliance Special Service Lines Lure The Physician Donations Watch Inflation

6. 10 WAYS TO IMPROVE YOUR FINANCES Right Size The Organization Use Flex Staffing Control Overtime Manage Supplies/Medicines Fewer Might Be Better

7. Strategy #1 Contract Compliance

8. 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”

9. Contract Compliance THE BILL Physician Services-----------------------500 Hospital Bed (5 nights)------------------250 Medicines given to the Patient--------100 Meals------------------------------------------25 Laboratory -----------------------------------50 Total------------------------925 Total------------------------925

10. Medical Supplies???

11. 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”

12. Contract Compliance THE BILL Physician Services-----------------------500 Hospital Bed (5 nights)------------------250 Medicines given to the Patient--------100 Meals------------------------------------------25 Laboratory -----------------------------------50 Total------------------------925 Total------------------------925

13. 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.

14. Strategy #2 Special Service Lines

15. Special Service Lines

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

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

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

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

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

21. Strategy # 3 Lure The Physician

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

26. Strategy # 4 Donations Donations To Nonprofit Organizations In 2013 $335.17 Billion 72% Is Given By Individuals

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

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

29. Strategy # 5 Watch Inflation Chad----------------------------------3.7%Nigeria--------------------------------8.2%Cameroon----------------------------2.6%Ghana--------------------------------16.5%Gabon----------------------------------5.2% Cote D’ivore--------------------------1.3%

30. Strategy # 5 Watch Inflation Angola---------------------------------8.8%Malawi---------------------------------21.2%Mozambique-------------------------3.5%Zambabwe----------------------------5.4%Madagascar--------------------------6.2% South Africa--------------------------6.3% Tanzania------------------------------6.5%Zambia--------------------------------8.0%Kenya----------------------------------5.6%Namibia-------------------------------4.4%

31. Effects Of Inflation Over Time 20092010201120122013 Inflation3%3%3%3% Income105105105105105 Expenses100103106.09109.27112.55 Profit/(loss)52-1.09-4.27-7.55 Profit Margin 4.76%1.9%-1.04%-4.07%-7.19%

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

33. WHERE ARE THE EXPENSES?

34. WHAT ARE THESE CHARTS TELLING US?

36. 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

37. 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.

38. 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.

39. Strategy # 7 Flex Staffing

40. What Nursing Staff Do You Need? Patients510152025303540455055Number Of Nurses 2234567891011

41. How Do You Deal With This?

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

43. 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

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

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

46. 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

47. 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?

48. 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

49. 10 WAYS TO IMPROVE YOUR FINANCES Contract Compliance Special Service Lines Lure The Physician Donations Watch Inflation

50. 10 WAYS TO IMPROVE YOUR FINANCES Right Size The Organization Use Flex Staffing Control Overtime Manage Supplies/Medicines Fewer Might Be Better