Whenever a hospital is facing financial hardship, it takes a huge overhaul to get operations back in order. It is actually common for a practice to file for bankruptcy to lighten the financial burden and begin working toward a better-structured facility. Unfortunately, research from the Virginia Commonwealth University and the University of Alabama Birmingham found that a significant percentage of hospitals actually close even after filing.
Part of the reason is that some practices were unable to truly readjust from past mistakes, which includes failure to keep accounts receivable management in order. If a hospital is not receiving sufficient pay for its services, while still paying all medical staff, the practice is more likely to get in the red.
Other financial problems include a lack of administration oversight, reimbursements reductions and "overzealous construction." Healthcare Finance News reported that these problems can serve as early warning signs.
"There was no sensitivity analysis," Amy Landry, assistant professor in the Department of Health Services Administration at the University of Alabama Birmingham, told the source. "It would have helped [these hospitals] to have been conservative and understand reimbursements can change at any time."
One way hospitals can reduce the likelihood of filing for bankruptcy and appearing more vulnerable to be bought out by larger networks if all staff members take the proper steps to keep debt low.
Combat the percentage of uncompensated care or outstanding medical bills by partnering with Professional Medical Services. We can help develop a strategy that is feasible for patients, which in turn will bring more resources back to the hospital.