Great strides have made towards resolving the bankruptcy. The solution requires everyone to "get in the boat and row in the same direction".
THE PROBLEM:
1. Significant progress has been made through the efforts of the present board and administration in reducing the operating expenses to almost break-even on a monthly operating basis.
2. Bankruptcy has sequestered several million dollars of debt, which are therefore NOT a part of the current monthly operating expenses. If the hospital exits bankruptcy, amortizing those expense will further challenge the operating budget.
3. There is limited cash on hand, most of which is already committed to required upgrades and completion of current projects.
4. Having defaulted on the line of credit and missed payments on several of the bonds, MCDH is likely not capable of obtaining additional credit. (Current bonds are rated "D").
5. Many of the cost savings to date have been obtained by decreasing and/or eliminating services across the board, without obvious prioritization. Further cuts threaten to make some services nonviable.
6. Across the board salary cuts have "crushed" employee morale.
7. Careful analysis reasonably concludes that the hospital may not be able to meet its monthly expenses within a year and may fail to exist.
THE CONSEQUENCES:
Failure of the hospital will mean:
1. The loss of over $40 million dollars of income to this community, predictably having a direct adverse effect on all of the local businesses.
2. The loss of 205 fulltime and 100 part-time jobs, exacting obvious personal toll on the individuals and with associated losses in local taxes, etc.
3. A probable significant decrease in property values as the area becomes less desirable and the sudden increase in houses on the market as the displaced employees leave to find viable employment
4. Significant decrease in the quality of health care for all residents
THE SOLUTION:
Complete reorganization and reprioritizing of the hospital's core services, which will require:
1. Understanding that high quality is the only competitive metric for a small hospital in the current environment
2. Determining which are the critical services required by this community
3. Determining which services the hospital can provide at a level of quality that exceeds the competition without significant capital expenses.
4. Recasting the current balance sheet and metrics to truly reflect the profit and loss of those critical services, so they can be optimized and improved or expanded where necessary.
SPECIFC STEPS:
1. Establish a new focused initiative "QUALITY IS THE ONLY OPTION!"
2. Embrace the fact that our employees are our greatest asset and a critical component to our solution.
3. Engage the community, including local businesses to determine what are the essential services required by the community
4. Determine by detailed focused analysis which services are profitable and which ones are not.
5. Optimize resources and personnel towards necessary profitable services. Direct more resources towards necessary but unprofitable services, to make them profitable. Eliminate unprofitable, nonessential services, securing transfer agreements to make those services more readily accessible to those who may need them.
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