Become Your Own Turnaround Expert

As part of that movement, he also looked to stabilize the physicians in the facility. To reverse the heavy turnover of physicians, he solidified relationships with local family practice providers and physician assistants.

"We signed long-term contracts with them. It really helped them get ingrained in the community so they feel this is a home for them."

Brockus and his staff worked to inform the public about the often complicated world of healthcare, such as what health insurance is, how physicians and hospitals get paid, and the definition of charitable care.

He says with this information the community can understand why healthcare is expensive and that hospitals get only a share of medical spending.

Hospitals need to fill the void for the community in this difficult economic time. He suggests they sponsor free movies and local fireworks displays. This will bring good will.

"It's time to sit up and be a community leader," Brockus says. "Look at what you do in your community to not only improve healthcare, but improve the community overall."

Charting a positive course
To help map a plan to fiscal health, Johns suggests creating spreadsheets that include financial performance numbers for each improvement initiative as well as who is in charge of the project, target date for implementation, and dollar impact from the project.

"This will give you a road map of where you want to go," says Johns.

Don't wait, Johns warns. One way hospitals fail is by not resolving financial problems before it's too late. Having bond covenants that need to meet thresholds like cash on hand or debt service coverage ratio means that if hospitals wait to turn around their finances, bond holders may beat them to the punch and force them to bring in an outside turnaround expert rather than letting the CFO turn it around.

"One of the key pieces of advice—particularly if you have debt covenants—is to begin this process well before you begin violating debt covenants," Johns says.

These challenging times call for CFOs with leadership skills who can help a hospital survive in a difficult period, Johns says. When dealing with financial downturns, CFOs need to communicate the circumstances to the CEO, the leadership team, the board, and the medical staff to get their support while also not causing a panic, says Johns.

Hester concurs that bringing the whole staff and community on board so they understand the issue and take part in the decision-making is a way to survive a tough economic time.

"The whole thing is you can't do it alone. You have to include all your managers and keep your board informed of all these changes and get their buy-in," says Hester.

—Les Masterson