How do Business Turnaround Services Apply to Hospitals?
By Space Coast Daily // February 6, 2020
As its name suggests, a business turnaround is a period in which any company that has gone through a downturn in performance, then moves into a period of financial recovery.
Business turnarounds are extremely significant because they provide a kind of line in the sand at which there is a recognizable improvement following a period of negative results.
A successful business turnaround often involves some kind of restructuring process where a company moves past its downturn period into one which is characterized by greater profitability, as well as a more stable outlook for the future.
As applied to hospitals and medical organizations, a business turnaround would be identified as a time of increasing profitability, which has followed a period of time where revenues were down and delivering high-quality patient care had become problematic.
What are Business Turnaround Services?
Business turnaround services are generally provided from a platform where it has become possible to carry out corporate restructuring so as to improve the performance of any business. Some of the components generally involved are centered around change management and on increasing overall productivity, which then leads to improved business performance.
Before any of these business turnaround services can be provided, it is generally necessary to conduct a full analysis of current business practices and the overall status of a given company. This analysis will include the company’s current brand recognition as well as a study of its working capital and cash flow.
Also included in the analysis will be a consideration of its strengths and weaknesses, threats to the business, opportunities that may exist, competitor activities, customer acquisition strategies, sales strategies, operational efficiencies, and the level of sales and marketing that are conducted via digital marketing means.
Once a thorough analysis of the client’s current status has been conducted, it will then be possible to implement a number of distinct business turnaround services which are intended to lead the company into better performance and greater profitability.
Some of these services might include developing a better business model with more realistic goals, cost-cutting measures, strategies for developing positive cash flow, and any restructuring of management that may be needed.
It may also be necessary to do some amount of restructuring with company employees, while identifying those individuals who are essential to company operation. Business turnaround services can also include attempting to significantly improve the corporate culture, and to provide more opportunities for professional development for employees.
Another area often addressed is the restructuring of operations, so the business performance can be improved and efficiencies gained. If a company has been deficient in its customer relationship management strategies, entirely new strategies may be developed, recognizing the critical importance of customers to any business.
Lastly, an important business turnaround service frequently needed by companies emerging from a negative period is to develop positive marketing strategies, for instance with regard to e-commerce or search engine marketing.
How can These be Applied to Medical Facilities?
Turnaround medical services can be extremely rewarding because there are likely a great many hospitals and other organizations which are currently operating in the red, and moving them into profitability can be very gratifying.
In many cases, business turnaround services for hospitals involve reducing the number of full-time or equivalent employees, renegotiating contracts for physicians, and lowering the cost of purchased services.
However, addressing these issues will only provide short-term relief, and they don’t really address the underlying issues which caused the negative performance in the first place.
In order to achieve a sustained period of profitability, it will be necessary to thoroughly convince senior leadership in the organization that improvement has to be made, or the organization may become defunct.
Then there has to be a willingness at the organizational level for change to be made, meaning that everyone has to do their part to carry out the changes identified as necessary.
A thorough analysis has to be conducted on business operations so that it is possible to diagnose what is not working, and needs to be fixed. Without that knowledge, any attempts at change management would be misguided and probably ineffective.
Once a thorough analysis has been conducted and all problems have been identified, it then becomes necessary to develop a strong turnaround plan and to implement this plan with enthusiasm and persistence.
If any of the above steps are missing or does not have full support from the organization, the turnaround services will not be effective, and the hospital will continue to operate in the same ineffective way as before.
It will be extremely helpful when obtaining buy-in from all employees and management if a culture of accountability can be established, so that everyone does their part in carrying out improvements.
A good idea would be to establish an incoming revenue analysis team that can analyze likely underpayment clients or no-payment clients, so that these kinds of situations can be avoided to the extent possible.
This analysis team should also group patients into segments of increasing profitability so that those more profitable areas can be emphasized by the business.
One thing that should be avoided is a knee-jerk response layoff of employees because that rarely produces the desired results. In fact, just the opposite might be achieved, because you would then be understaffed and unable to provide adequate services to clients.
There’s a much better opportunity to reduce costs by monitoring purchased services, supplies, leases, utilities, and physician contracts. These should all be re-evaluated with a view toward cost-cutting wherever possible.
Business turnaround services can be absolutely critical in the lifecycle of a hospital or medical organization, especially one that has recently been through a down period or is currently embroiled in a prolonged period of negative business performance.
It’s a rare organization that has the expertise in-house to pull off effective business turnaround services, and that’s why it’s necessary to bring in professionals who specialize in these kinds of turnarounds.
Contact us today at Community Hospital Corp, so that we can help your hospital or medical organization emerge from wallowing in the red, and returning to profitability and excellent performance.
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