Too Small to Fail: Why Letting Community Hospitals Die Isn't an Option

What's the mission of a community hospital? The answer isn't so simple. While intuition says its mission is to provide care to its community, it also serves on another level.  "It's a matter of survival," said Michael D. Williams, FACHE, president and CEO of the Community Hospital Corporation, in his talk on preserving community hospitals at Becker's Hospital Review's 5th Annual Conference in Chicago on May 15.

Mr. Williams, a former hospital executive himself, now runs the organization whose mission is, as he describes it, to enhance, preserve and guide community hospitals – non-profit organizations with deep foundational ties to the towns and cities in which they are based. 

"Why do you exist?" he asked the assembled audience. "It's a matter of survival." Often, he noted, community hospitals are a major employer in their place of origin. When community hospitals falter, the viability of entire metropolitan areas, especially in rural environments, is in jeopardy. 

Remaining viable as a community hospital can be tough, especially when volumes are low and margins are scant. It requires leadership, accountability and a rapport between the board and the leadership where it comes to business plans and strategic planning. Having one educate the other on where they have the potential to assist in mutual accountability is often the only way to turn a failing community hospital around, he said. For struggling community hospitals he recommended the following:

1. Prioritize strategic direction. Know what your organization will prioritize for the next 12 months, and educate and involve all stakeholders.  Keep constant tabs on whether priorities are consistent with hospital missions and are economically viable.  Include a business plan, which should be as fact-based, rather than emotion-based, as possible. Remember, physicians, who can have the reputation of being notoriously difficult to work with, respond well to facts.

2. When it comes to revenue cycle consultants, ask what they can leave behind. The takeaway from consultants should be an educational process that allows your people to do what they need to do. Consultants can't stay forever.

3. Supply chains are important. Choosing the right group purchasing organization or purchasing plan is a short-term critical success factor with the potential double the bottom line when properly managed.

4. Don't neglect meaningful use, if at all possible. Government incentives can be lucrative when they are strictly followed. An organization does not have to have a Cadillac EHR to succeed.  Get a health IT audit to see what is in place and what is still needed where it comes to technology.

5. Address operational efficiency. Have the right full-time equivalents at the right place at the right time.

Above all, when it comes to long-term survival, the board-CEO feedback look of education and accountability is overall key, he said. "Can an organization be performing sub-optimally and change without a change in leadership? Sometimes, depending on the skillset of a CEO and the board, and how fast their ship is burning. If they don't change, they close," he added.

He urged executives to think about the role the board has the potential to play where it comes to the hospital as a successful business: "Think about the relationships that must be engendered to assist in your survival."

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