Financial Resource Group

• Case Study One
• Case Study Two

Case Study Two

A 243-bed hospital in the Southwest had experienced a couple of audits with numerous same deficiencies that had not been corrected from year to year. The Board of Trustees made the determination to replace the CFO after this occurred with no improvement the second year. During this same time, the information being given to the Board was often inconsistent and contained errors.

The facility was also in need of doing a Strategic Long Range Plan. It had been several years since this had been done and a financial plan had never been completed in conjunction with the Strategic Plan. This process needed to occur and the fact that a competitor was coming to town made this even more critical. The decision had to be made as to whether the hospital could survive with a for-profit competitor coming to town.

FRG was asked to come in and serve in the Interim CFO role and assist in evaluating the potential of the then Assistant CFO as well as improve the current financial operations and reporting of information to the Board. As a result of the diversity and experience of FRG we were able to accomplish the following:

1. Provide Interim CFO services and evaluate and recommend promotion of assistant CFO to CFO role. Remained on after promotion to work with new CFO and assist in long range financial plan.

2. Patient Financial Services Manager left shortly after interim CFO role began. FRG had the resources to bring in an Interim person while a search for a permanent PFS Manager was conducted.

3. FRG brought in consultants with expertise in Managed Care, Information Services, Patient Accounting, and Cost Accounting to perform operational reviews of these areas. This resulted in improved operations and better data for making decisions.

4. As a result of the cost accounting assistance, the cost information for making decisions in the strategic plan process was more accurate than in the past. The prior information was not trusted because of inconsistencies in the data.

5. Revised data and format being presented to the Board of Trustees so that information was accurate and understandable. Board developed a trust in the information that had not been there in the past.

6. Reviewed charge structure and determined that charges were significantly below market in the New Mexico area. Price increase was implemented that would increase net income by $8 million a year.

7. Referred a consulting company specializing in strategic planning to lead the hospital through the process. FRG provided additional consultants to develop the financial strategic plan along with the operational strategic plan.

8. Implemented budgeting software that improved the productivity of the budgeting process and allowed the hospital to easily factor in the estimated impacts of the strategic plan initiatives into the operating budget.

As a result of the work of FRG, the hospital was able to improve the financial reporting process and regain the confidence of the Board of Trustees. This was important going into the strategic planning process and expecting the Board to make decisions based on the financial projections. Through the Strategic Planning Process, the Board made the decision that they could be competitive with the competitor and developed several initiatives to be undertaken to help meet this challenge.