Rural Hospital Cash on hand is less than 10 days and falling! Where to cut expenses if your opportunities have not been exhausted.
Given:
- Hospital CEO turnover is more the 30% annually. Over a five year period, that has created about 125 CEO seats turnover in Georgia. That does not include CFO and CNO turnover which further exacerbates the problem. That means that C-Suite familiarity with internal protocols is very difficult. That means that CEOs and CFO’s have to work twice as hard to keep up with cash. Nationally average CEO tenure is about 4 years and in some cases in Georgia it has been 1-2 years.
- Cash shortages in many of Georgia’s rural hospitals are at a critical stage with some Georgia Rural hospitals having less than 10 days cash, some less than 5 days cash and some near zero days cash on hand
- HomeTown has identified at least 12 rural hospitals or more that may fall into this category and the number has been adding one a week for last month
- The problem is now at a systemic stage among rural hospitals in Georgia. It will not get better on its own. There is insufficient rural patient volume out there to add revenue without taking it away from a neighbor
- Pending state budget cuts, though not programmatic, will hit agency administrative areas that are necessary to solve problems controlled by the state
- The cause of the financial agony in Georgia is in part due to
- 20 years of Medicaid underpayment at 85.6% of cost (that ain’t gonna be fixed quickly),
- Sequestration,
- As reported yesterday , this is the first quarter in the 2020 insurance year and deductibles have soared in some cases to $7,500 up to $10,000, co-pays are very high and some patients just do not have insurance , all of which adds up to self-pay, indigent, and under-insured, and
- Business Office complexity with 42 payment platforms to be tended to