Hospitals at Risk
Numerous hospital executives, advisors, academics and organizations are increasingly shouting from the rooftops that more and more hospitals are at risk. They are not crying wolf. There is a broad spectrum of current vulnerabilities confronting hospitals, experienced by and suffered by these hospitals now. That negative spectrum ranges from bad to worse, to worst case scenarios.
The focus of their concerns is with the roughly 1,000 rural and small hospitals under $150MM in net patient revenues. These are the hospitals most at risk and with all facing, to various degrees, some form of dire consequences.
That risk includes a continuum of concerns from closure of capital markets for select, yet many hospitals, to outright complete closure and disappearance. To make matters worse, the gap between higher performing hospitals and under-performing hospitals is expanding, making it far more difficult to unite the hospital industry to have a unified front against these hospital stressors or to utilize a common set of agreed-upon solutions.
Of most immediate or even emergency concern are the 240 hospitals now at risk of closing this calendar year. Also of current concern are the additional 750 hospitals either at risk of closure within the next 24-36 months and a far larger number of hospitals at risk for service closures. These service closures include, but are not limited to: labor and delivery, psych/substance abuse, rehab, pediatrics, burn, home health, ER, et. al. This also includes those hospitals facing in effect “forced” service outsourcing for lab, psych, ER, hospitalists, revenue management, anesthesiology, supply chain management, dialysis, et. al.
Other hospitals facing these daunting dilemmas in effect throw in the towel and become a hospital without an ER, in effect modifying the very definition of a hospital. Other hospitals in a similar boat do the mirror opposite and get rid of everything but the ER and become a federally subsidized and designated rural emergency hospital with no acute beds. This approach drastically limits the meaning and substance of a hospital, virtually closing 90% of the hospital, where what’s left dramatically and strategically retreats for the chance to have a federally subsidized survival. Other hospitals are simply absorbed and swallowed up in rapid M&A activity. Often the acquiring hospital/system does no better and ultimately closes the too-expensive small/rural hospital or converts it to out-patient services only.
Rural and small hospitals almost by definition face a very limiting and treacherous internal and external environment.
Rural and small hospitals are almost always in small communities with limited resources, declining employment, declining insured patients, declining tax base and increasingly a growing Medicaid and no-pay patient base. More and more community paying/insured patients go out of town for their care, especially for non-emergency care, leaving their hometown hospital bereft of paying/insured patients.
As such, with all these short falls, these hospitals have a hard time attracting sufficient numbers of nurses, physicians, specialists, executives, let alone experienced experts in rural/small hospitals. These hospitals face chronic and expensive nurse insufficiencies. These hospitals are forced to use unaffordable, expensive agency/travel nurses. These hospitals also increasingly and unavoidably use expensive interim management for CEO, CFO and CNO positions.
These added expenses and declining revenues create a chronic emergency and vicious cycle for these rural and small hospitals. Staff, executive and paying patient turnover and deficiencies make it very difficult and unaffordable for these rural and small hospitals to operate on a continuously sound footing. It’s too onerous for them to effectively and quickly confront these burdens on their own and/or with expensive outside help. That’s where Microscope’s Margin Solutions can help.
Margin Solutions is a comprehensive, infrastructure-wide, margin-enhancing service. It’s always zero-risk with zero upfront fees and zero out-of-pocket fees. Because Margin Solutions always produces new net/net new dollars, it’s always affordable and always margin-enhancing even for the most financially and structurally stressed hospital.
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