A nyc community hospital was losing thousands and thousands of dollars per month and was going to close its doors. Though its cost structure was well below almost any of the other hospitals in the region, it was still suffering financially. In light of declining reimbursement and patient volume, also with an increasing concern regarding continued liquidity, in order to preserve its vital core of services for the area, the hospital turned to the strategy that had helped it avoid past fiscal difficulties: price Clinica Iztacalco reduction.
However, this time the tactic worked against the hospital. Having removed nearly all of the fat in the business, in desperation, the hospital has been left with little to lower other than the muscle. To better handle expenses, the hospital reduced surgical hours of surgery, postponed necessary investments in the growth of surgical services, and postponed replenishment of surgical gear required by many of its surgeons. This resulted in surgeons beginning to take their patients everywhere. Critical patient flow improvements into the emergency department (the significant source of admissions for the hospital) were postponed, and raising overcrowding resulted in more individual walkouts and more regular recreation of ambulance visitors to other associations. Admissions diminished, exacerbating the fiscal crisis. Vendor payables were extended to the limit and the hospital began having difficulties receiving shipment of necessary supplies. The hospital was at a classic downward spiral.
To halt the precipitous decrease, the popular prescription for a sick clinic was changed, and an entirely different routine of investment and growth was implemented. Through a strategic mind-shift, management took a new approach to the situation. Cost cutting and layoffs were outside, and focusing on the residual capital of this institution on investment in growth turned into the master game plan. Investments were made in staff and quality education, surgical and emergency services capacity, and in support lines that both fulfill a vital community health need and generate a positive bottom line donation. The hospital’s investment orientation, and its careful selection of key productive assets in which to invest, was the fulcrum about which a new team turned itself around and became an inspiration for its community, physicians and employees.