Measuring Community-Based Healthcare Organization Financial Health

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Measuring Community-Based Healthcare Organization
Financial Health

• Tim Clouse
• U.S. Department of Agriculture
• Gil Silva
• Rob Gilliam
• Health Resources and Services Administration

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I Know It When I See It

• What is good financial health for a
  community-based healthcare organization?
• Is there an easy way to determine it?
• Is there an understandable way to explain it?

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Half of Them Are Above Average

• Rates community-based healthcare organizations
• Relative to a sample of similar organizations
• Simple, objective, and flexible
• Currently in use

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Death and Taxes The Only Two Certainties

• Uses available financial data
• Simple (?) calculations
• Identifies problem areas
• General type of problem
• Suggests remedies

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Financial Risk Assessment Worksheet and Required
Data Instructions An outpatient safety net
provider can use this worksheet to evaluate its
financial risk relative to our sample of
outpatient safety net providers. Fill in each box
with the information requested and do the
calculations. If information is missing, either
use an informed judgment as to the actual value
or assume that the benchmark is met (i.e., the
provider gets full points for that measure). If
the resulting calculation yields more points than
maximum in that category, only the maximum points
are given.


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LIQUIDITY (measures if a provider can meet obligations over the short run) LIQUIDITY (measures if a provider can meet obligations over the short run)
CURRENT RATIO A
WORKING CAPITAL B

• Benchmarks and Points

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Whats the Bottom Line?

• Low scores are a Bad Thing
• Not risk of bankruptcy
• More Research Is Needed
• What areas are low?
• Possible fixes
• Fee structure, billing, and collecting

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All Politics Is Local

• Every situation is unique
• Changing the benchmarks for each score
• Changing the weights/emphasis for each score
• Changing the risk categories

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The Chicken and The Egg

• The Financial Risk Assessment Model also works
  backwards
• Using it for a performance benchmark
• Knowing what to watch for
• Planning for a new organization
• Planning to sustain