More and more hospitals contact us to help with dire financial situations. The first hospital client I had at Stroudwater called because they had lost $6M the year before. When we asked what their days cash on hand was, the board chair, CEO and CFO laughed because they were literally out of cash. The sad part was that they had been in good shape five years earlier and healthcare systems wanted to partner with them. But because they were adamant about remaining independent and not thinking about improving operations, over five years they ran through their assets. They closed three months later.
Most of our clients don’t wait that long, thank goodness. And we can help. We recently worked with a community hospital that had lost $5M in operations the year before and had a new CEO. They have a strong quality culture and wanted to maintain their national prominence in patient safety. We partnered with their leadership and they realized a $1.5M operating gain the following year. How did that happen? We walked them through a process we called Accelerated Operations Improvement. In this process, we analyze their situation, reach consensus on financial goals, and coach teams on identifying opportunities to reduce expenses and increases revenues. In the process we focus on strengthening management and leadership competencies and capacity and accountability systems so that the improved financial performance in sustained.
What distinguishes Stroudwater is that while we have an approach – in this case Accelerated Operations Improvement – we customize standard approaches to every client. For example, we have a small community hospital that recently called wanting operations improvement. But with an Interim CEO and no strategic plan, they first needed to start by reaching consensus on strategic priorities and direction. So we are now working with them on developing a strategic plan to be followed by operations improvement. We have customized our approach to their size and their challenges and their budget.
Janet Porter, PhD is a Director at Stroudwater.