Source: The News-Enterprise
Owners and key leaders of commercial businesses have at their disposal a variety of measures to help them understand and track their organization’s progress in the marketplace.
Engaged managers closely monitor metrics on units sold or delivered. They track how customers are acquired, what their satisfaction levels are and the degree to which they are retained over time. They scrutinize and fret about the return their shareholders or partners are receiving on investments made. They follow the ups and downs of staff performance and productivity in relation to the condition of the marketplace.
These and more are important gauges every savvy executive observes on the operational dashboard of his enterprise. But the bottom line on a business’ success and sustainability is exactly that — its financial bottom line.
During a recent meeting, Hardin Memorial Hospital’s board of trustees received an excellent report on the health of the hospital’s bottom line. In fact, HMH saw its bottom line improve by a swing of more than $27 million from its 2014 fiscal cycle. Hospital officials called it a “phenomenal year” for the health care facility.
Indeed it was.
At the end of its 2014 fiscal period, the hospital was dealing with an operating shortfall of more than $7.6 million. Under the leadership of CEO Dennis Johnson, the hospital initiated tough strategic and tactical actions focused on physician, nursing and support staffing; renegotiation of contracts; acquisition of outpatient services; and cutting targeted operating expenses.
In certain cases, the actions weren’t well-received by employees working within the regional health care facility. During the most recent election season, some political hopefuls also aggressively questioned many of the decisions being made by the hospital’s administration and approved by magistrates serving as its board of trustees.
Despite any disapproval or second-guessing the strategic plan might have received, the results being produced have repositioned HMH to record an almost $19.4 million variance of revenues over expenses in fiscal year 2015.
Another of the hospital’s key metrics, its cash-on-hand – an important measure of funds that are immediately available to an organization for use as needed – grew from 71 days last year to just less than 118 days in 2015.
This improvement led to a revision from stable to positive in the hospital’s Standard and Poor’s rating outlook.
Like receiving a clean bill of health from our doctor at the end of an annual physical, the hospital’s financial bill of health this year is great news. Coming off consecutive annual operating losses during the previous two periods, these strong results illustrate the hospital is operating with sound fiscal procedure and discipline. And a financially healthy hospital is key to supporting a healthy community.