End Negative Ops Margins: Part IV
Welcome to Part IV of our 4 Part series on optimizing margins by ending negative ops margins. Part IV concludes this 4-week series of 4 Parts. All 4 Parts are now available for your consideration, on request, as single complete booklet. Please don’t hesitate to email us with any questions, comments or requests. <<REQUEST A COPY>>
<<READ PART I <<READ PART II <<READ PART IIIPART IV
REVERSE Q&A, WHERE WE ASK YOU THE QUESTIONS:
Let’s turn the tables and get a 360-degree perspective on where these margin-enhancing solutions come from. Let’s see how these solutions increase your ops margins, in effect converting your negative ops margins to positive ops margins.
• To get a better picture of the details and functionalities of these margin-growing solutions, let’s look at some of the central core dollar-growing mechanisms of these solutions. What makes these solutions tick and what makes new dollars, and better yet, what makes more positive margins for your hospitals?
• How does an isolated idea become an implemented, dollar-adding, margin-enhancing solution?
Please self-participate and select or make educated best guesses as to the best answer (i.e., the answers most fitting the question) from the following multiple choices:
For the answers to these questions and the facts supporting these answers, please contact:
Rick Kunnes, MD
Managing Principal-Margin Solutions
972-849-7942
Reverse Q&A
Question 1
What % of aged AR claims (1 year old to 6 years old) does your hospital, on average, currently collect on?
(A) 3%
(B) 2%
(C) 1%
(D) 1/10th of 1%...if this low, why bother?...
Question 2
What % of aged AR claims (1 year old to 6 years old) does an experienced, aged-AR claims collector/manager collect on, on average?
(A) 6.0%-6.5%
(B) 5.5%-6.0%
(C) 4.0%-5.0%
(D) 2.0%-3.5%
Question 3
When your hospital receives notification of unpaid and underpaid claims, what % of NPR can/does an experienced claim processor recover from these unpaid and underpaid claims, on average?
(A) 1%-1.5% of NPR
(B) 3%-4% of NPR
(C) 5%-6% of NPR
(D) 7% of NPR
Question 4
How many times can a hospital standard bed linen/sheet be laundered (in-house or outsourced) before it becomes non-usable?
(A) 35-40 times
(B) 25-35 times
(C) 15-25 times
(D) 8-12 times
Question 5
For your OEM’s (original equipment manufacturer) maintenance & repair (M&R) of complex equipment, what % of these OEM’s M&R expenses can be saved per year, on average, by an experienced, non-OEM, (third party) M&R manager?
(A) 5%-10%
(B) 10%-20%
(C) 20%-25%
(D) 25%-35%
Question 6
What % of “uninsured”, “self-pay” and “zero-pay” patients are eligible for Medicaid, on average?
(A) 3%-5%
(B) 6%-9%
(C) 10%-14%
(D) 12%-25%
Question 7
What is the fully-loaded cost for an off-site documentation storage box per month, for up to 10-20 years...often involving 100s of boxes?
(A) $0.10-$0.20, per box, per month
(B) $0.30-$0.40, per box, per month
(C) $0.50-$0.60, per box per month
(D) $0.70-$0.95, per box per month
Question 8
What are the average savings achieved by an experienced, hospital-friendly documents storage manager for off-site storage?
(A) 20%-30%
(B) 40%-50%
(C) 50%-60%
(D) 60%-75%
Question 9
For all hospital-related (inpatient, outpatient, off-site, etc.) aged AR claims, 6- months old to 12-months old, what is the average small hospital collecting as a % of total dollars owed from these aged claims?
(A) 15%-20%
(B) 10% -15%,
(C) 5%-10%
(D) 1.5%-4%
Question 10
For all hospital-related aged AR claims, 6 months old to 12 months old, what is the average small hospital collecting as a % of the total dollars owed from these aged claims, using a well-run discounted amnesty program?
(A) 20%-25%
(B) 15%-20%
(C) 8%-15%
(D) 4%-8%
Question 11
What %, on average, of small hospitals’ cafeterias, nationally-speaking, lose money most/all years?
(A) 95%
(B) 85%
(C) 75%
(D) 65%
Question 12
What is the fastest, easiest, best, most constructive and most lucrative way to end small hospital cafeteria losses?
(A) Shut it down as quickly as possible
(B) Sell and/or lease it to a local restaurant owner.
(C) Sell and/or lease it to a national/regional fast-food franchise
(D) None of the above
These reverse Q&As (where we ask you, rather than you ask us) show the relatively easy, quick and cost-efficient opportunities for small hospitals to develop and timely implement high dollar-producing, margin-altering solutions.
The solutions* implied by and grown from these Reverse Q&As, are only a small sample of the 1000s of such solutions that are in the public domain, proven-in-practice and always margin-enhancing.
Remember...Every one of these implemented solutions produces new net savings and/or new net revenues.
- Once many of these solutions are implemented, their new savings and new net revenues can continue for many years...after initial implementation...with no new effort or investment, greatly raising your ROI often indefinitely.
- A selective collection of these margin growing solutions, as a whole, is greater than the sum of its parts in terms of financial, operational and administrative enhancements.
- Most importantly and simply, when dozens of these solutions are actually implemented, your resulting new savings and new net revenues will…END NEGATIVE OPS MARGINS.
Please contact us with any questions, comments.
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*Before attempting to implement any of the above implicit solutions, please consult with an experienced, qualified professional hospital advisor.
For more information or requests, please contact:
Rick Kunnes, MD
Managing Principal-Margin Solutions
972-849-7942
Learn more about our Margin Solutions Express Service for Hospitals
Meet the Author:
Rick brings over 35 years of experience in the healthcare industry helping hospitals and health systems on an enterprise-wide basis. He has worked as a Partner at a “Big Four” accounting/consulting firm, as a Managing Principal at one of the largest accounting/consulting firms in the Midwest, as a Chief Medical Officer at a 50 hospital/health system and as a Founder/CEO of a hospital consulting firm serving hospitals in 33 states.
As the leader of Microscope’s Margin Solutions, Rick works with hospitals to utilize a unique and patented approach to address hospitals’ needs for bottom-line enhancements by substantially increasing their savings, revenues and collections on a customized basis for each hospital/system. These bottom-line improvements facilitate cost-effectiveness and cost-efficiency, all without layoffs.
He is a member of the American Society of Addiction Medicine, Physicians Without Borders and the Sierra Club.
Rick was educated and trained at Johns Hopkins and Columbia Universities.
972-849-7942
