The hospital was losing money, productivity reporting was haphazard, and little, if any, action was taken when departments were over budget or missed productivity targets. Significant management turnover in the previous five years had led to an inconsistent focus on operations.
Reimbursement rates had remained stagnant, while the cost of providing services continued to climb. Adhering to trends nationally, the hospital’s volumes shifted from inpatient to outpatient cases, including cardiology, which made up 41 percent of inpatient volume. In a significant financial blow, the hospital lost more than $10m in federal funds in just one year, the equivalent of 13 percent in net revenue wiped out almost overnight.