Case Studies: Management Engagement
Case studies provide insight on how we stabilize, turnaround, and enhance healthcare organizations. Use the table of contents to navigate through the case studies in this section.
Table of Contents
A 150 bed hospital in a small urban center.
Challenge
A $2.7 million loss; FHA mortgage default; credit holds; simultaneous multi-system failures; and potential closure.
Results
An increase in both utilization and revenues coupled with a reduction in expenses and liabilities resulting in improved productivity, market positioning, and profitability in just one year.
Solution
Development and professional management of an aggressive one-year Turnaround Plan followed by a three-year fiscal oversight role.
The Hospital retained Kurron to develop and implement a Turnaround Plan. In one year, the Hospital reduced its losses to $200,000. A workout agreement with HUD resulted in avoiding $600,000 in recaptured capital reimbursement. Cost reductions with labor savings and outside service contracts negotiations approximated $400,000 per year, improving bottom line performance. Through enhanced profitability and cash management, close to $1 million of outstanding vendor liabilities were liquidated.
Successful turnaround activities also resulted in dramatic improvements in inpatient and outpatient utilization. To boost outpatient activities, Kurron recruited a Director of Ambulatory Care, a hospital-based full-time family practice physician, and secured a $70,000 primary care grant. The expanded ambulatory care network yielded increased visits of 45% in one year.
Hospital inpatient utilization increased by 27% in one year, while the average length of stay was reduced by 14%. Case finding in the emergency and ambulatory areas generated incremental inpatient referrals. Additionally, the inpatient psychiatric and behavioral medicine units increased patient volumes.
104-bed community hospital.
Challenge
Ongoing losses from operations; default on Mortgage Bond Agreement; faulty leadership.
Results
Initially the Hospital was successfully functioning independently through an area-wide provider network. It was later acquired by a local health care system in Richmond.
Solution
A management agreement with Kurron.
The Board of Trustees engaged Kurron, after the incumbent management services company did not deliver promised results.
Kurron implemented a Turnaround Plan, which reduced the Hospital's losses from $865,000 to $393,000. Operating expenses were reduced by nearly $500,000 or 4% coupled with a reduction in the average length of stay of more than 5%
Kurron helped the Hospital develop a psychiatric and behavioral medicine specialty market for inpatients and outpatients, resulting in a successful $480,000 grant for outpatient substance abuse services, generating ambulatory and inpatient referrals.
To facilitate managed care contracting, Kurron also positioned the hospital to participate in a multi-facility health care network. This also generated an additional $250,000 in annual savings from group purchasing contracts. Kurron was instrumental in orchestrating a multi-institutional debt refinancing, which allowed the hospital to fund the renovations and equipment necessary to construct and open a hospital-based emergency department.
A 340 bed multi-facility hospital system in New Jersey
Challenge
A $10.2 million loss; loan covenant defaults; aging facilities; declining reimbursement; increasing percentages of uncompensated care; urban flight; increasing competition; and lack of effective leadership.
Results
Within 15 months of the beginning of Kurron's engagement, the Hospital Center at Orange eliminated all losses and was subsequently acquired by the Cathedral Health System.
Solution
A multi-year, full service management agreement. Kurron was engaged by the Hospital's Board of Trustees to improve its fiscal position and implement the approved strategic plan.
In the first 90 days, Kurron was successful in implementing a comprehensive Management Action Plan addressing financial recovery and market positioning. Kurron also helped finalize the acquisition of a 240 bed nursing home, which added skilled nursing and sub-acute services to the hospital's offerings. The length of stay was reduced by over 4.6 days. Additionally, Kurron engaged in charity care reimbursement negotiations with the New Jersey Department of Health, resulting in increased allocations.
Kurron was also successful in securing multiple managed care and obstetrical agreements, which increased deliveries by over 75%.