CFO Simon Scholtz: Upgrading Lawrence Memorial Hospital in Kansas
Simon Scholtz, vice president and CFO of Lawrence (Kan.) Memorial Hospital, has been with his organization since 1999, and as he prepares to retire this month, he is able to look back and see the financial standing of LMH has only gone up.
Last week, rating agency Moody's Investors Service upgraded LMH's bond rating to A1 from A2, which puts the hospital's credit at the high end of "upper medium grade."
Mr. Scholtz oversees the accounting, patient accounts, admissions, materials management and other financial aspects of LMH, and Moody's has taken note of the hospital's financial strengths. At the end of fiscal year 2011, LMH's balance sheet showed 217 days of cash on hand, and it had a 12.6 percent operating cash flow margin as LMH has consistently recorded double-digit operating cash flow margins.
Moody's analysts also said Mr. Scholtz and LMH are in a leading market position "as a sole community provider in the demographically favorable Lawrence, Kan., home of Aa1-rated University of Kansas."
Mr. Scholtz says the keys to a positive operating margin for hospitals today involve great service, maximum revenue capture and managing expenses. "Provide excellent service so your community continues to use your services," Mr. Scholtz says. "Collect as much as you can — all phases of revenue cycle must be managed well. And with [Recovery Auditors], quality measures, value-based purchasing, etc., it’s tempting to continually add new technical people to address these needs. However, with little new revenue available, costs must be contained."
Before arriving at Lawrence Memorial, Mr. Scholtz was deeply entrenched in the Texas healthcare scene. He was CFO of Baylor Medical Center at Irving, which is part of Dallas-based Baylor Health Care System, for 12 years. He also served as controller for Memorial Hermann Healthcare System in Houston.
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