By Joanne Finnegan
Leaders of financially struggling hospitals have tough decisions to make.
But the best strategy may be to strengthen a few key areas to stabilize the hospital's finances, according to Becker's Hospital Review.
The publication compared the quest to right a hospital ship to the attempt to rebuild the Chicago Cubs, a baseball team that hasn't won the World Series in 105 years.
In other words, it's not an easy job and doubting Thomases may wonder in both cases if a turnaround is even possible. Choosing where to focus attention can be a big gamble for both baseball teams and hospitals.
Which hospitals are likely facing tough times? The picture hasn't changed much over the years. Eight years ago, a Healthcare Financial Management Association study found over half of U.S. hospitals faced financial struggles. As is the case today, rural hospitals and those not affiliated with a health system--an estimated 1,000 facilities---are particularly at risk from competition.
Those struggling hospitals are often in a tough payer neighborhood, don't have a strength which sets them apart as leaders in the field, and don't have a lot of finances to invest heavily in areas that can help them recover, reported Becker's. If conventional wisdom says owners and managers can turn around a baseball team by building its pitching staff, hospitals have to make similar choices, according to Beckers. Leaders at many small to mid-sized hospitals often try to satisfy many needs, such as keeping their emergency departments open, hiring more primary care physicians, and serving many Medicaid and indigent patients.
In the most successful turnarounds, hospital leaders often have to "starve" the hospital in one area and focus on making it great in others, the publication said. It gave as an example, the CEO and board deciding to cut office staff while bringing orthopedic physicians on board. It's a gamble, however, whether the physicians will stay for the long haul or bring in the expected business to the hospital.
Sometimes, the strategy doesn't work and the hospital must look to sales or mergers to keep their doors open. Becker's pointed to statistics from Irvin Levin Associates, which shows that in 2012, there was twice the number of hospital mergers than in 2009. Eighteen hospitals closed their doors last year.
And the financial picture doesn't look any brighter. Thanks to the Affordable Care Act, hospitals are facing multi-million dollar losses, Fierce Healthcare previously reported.
But turnarounds aren't impossible. Just ask Boston Red Sox fans who saw the team end an 86-year losing streak with an improbable World Series win in 2004, topped by repeat performances in both 2007 and 2013.
To learn more:
- check out the Becker's Hospital Review article