Financial Statement Analysis
Don Pursley, Col Ret. USAFA, BSE, MS, DBA
The speaker does not have any relevant financial relationships with any commercial interests
I Have A Financial
Statement.
So What?

So Dr. Landless will be Happy.

So the CFO will not get fired.

So we can say we have one.

So the accounting staff will have something to
do.

So we can impress the patients.

So we can use the extra paper in storage.
If We Do Not:
Analyze
Correct
the statement.
financial problems.
Improve
the Institution.

Save the paper.

Reduce the accounting staff.

Explain our reasoning to Dr. Landless.
As a Non-Finance Individual What
Do You Need to Understand a
Financial Statement?
1.
2.
3.
An accounting degree?
A good course in reading financial
statements?
Willing to ask questions until you
understand it?
Financial Analysis
Step 1: Produce a complete timely
accurate financial statement.
Step 2: Explain the differences.
Step 3: Do Comparisons.
Step 4: Determine the problem.
Step 5: Ask yourself: Now what?
A Complete Financial Statement
What are the key components
of a financial statement?
BALANCE SHEET
TOTAL NET
ASSETS
1,336,000
STATEMENT OF FINANCIAL
ACTIVITY
NET INCOME
705,000
Pursley Adventist Hospital
Sept. 30, 2013
Current A s s ets
Cas h in Bank A
Cas h in Bank B
Petty Cas h A
Petty Cas h B
Pes s ty Cas h C
A c c ount Rec eiv able Patient A
A c c ount Rec eiv able Patient B
A c c ount Rec eiv able Patient C
Medic ine A
Medic ine B
Medic ine C
Tow els
Bed s heets
Pillow Cas es
Bandages
2013
23,400.23
12,456.34
123.00
450.00
345.00
34,502.45
450.34
345.09
123.56
3,456.89
4,536.89
23.00
345.09
3,456.00
342.89
2012
20,826.20
11,086.14
109.47
400.50
307.05
30,707.18
400.80
307.13
109.97
3,076.63
4,037.83
20.47
307.13
3,075.84
305.17
86,369.77
77,089.53
2,346.89
3,456.89
3,267.67
4,567.98
345.90
3,425.89
12.00
12.00
12.00
45.00
45.00
567.00
2,346.89
3,456.89
3,267.67
4,567.98
345.90
3,425.89
12.00
12.00
12.00
45.00
45.00
567.00
23.00
34.00
23.00
34.00
18,161.22
18,161.22
104,530.99
95,250.75
567.90
6,897.45
5,368.67
4,356.00
556.54
6,759.50
5,261.30
4,268.88
17,190.02
16,846.22
Non Current Liabilities
Debt 1
Debt 2
Debt 3
Total-Non Current Liabilities
4,567.00
5,342.00
45,467.00
55,376.00
4,475.66
5,235.16
44,557.66
54,268.48
Total Liabilities
72,566.02
71,114.70
104,080.99
94,850.25
Total Cur r e nt As s e ts
Property & Equipment
Land Plot 345
Land Plot 423
Land Plot 678
Building Y
Building X
Building Z
Des k 1
Des k 2
Des k 4
Computer 1
Computer 3
A mbulanc e
Program 1
Program 2
Total Fixe d As s e ts
Total A s s ets
Liabilities
Current Liabilities
Pay able
Pay able
Pay able
Pay able
to
to
to
to
A
B
C
D
Total Current Liabilities
Fund Balanc e
Financial Reports
Five Levels

LEVEL 1: HOSPITAL








Statement of financial position
Statement of financial activity
Working Capital
Notes
LEVEL 2:
LEVEL 3:
LEVEL 4:
LEVEL 5:
LINE
DEPARTMENTS (including volumes)
SERVICE/PRODUCT LINES
PAYERS
PAYER BY SERVICE/PRODUCT
Four Basic Rules

Rule #1: Produce at least level 1 statements

Rule #2: Be timely.

Rule #3: Show accurate current data.

Rule #4: Show accurate comparative date,
(budget and one year ago).
PURSLEY ADVENTIST HOSPITAL
BALANCE SHEET
AS OF 31 Jan. 2015
Date Produced Jul. 31, 2015
PURSLEY ADVENTIST HOSPITAL
BALANCE SHEET
AS OF 31 Jul. 2015
Date Produced Aug. 14, 2015
Pursley Adventist Hospital
Balance Sheet
As Of Jul. 31, 2015
Current Year Last Year
Current Liabilities
Payables
Accured Payroll
Current Part of LT Debt
Long Term Liabilities
Long Term Debt
Total Liabilities
Total Net Assets
1,064,000
243,000
12,000
85,000
233,000
13,000
125,000
146,000
1,444,000
477,000
1,336,000 2,453,000
PURSLEY ADVENTIST HOSPITAL
STATEMENT OF FINANCIAL ACTIVITY
AS OF 31 Jul. 2015
PURSLEY ADVENTIST HOSPITAL
STATEMENT OF FINANCIAL ACTIVITY
AS OF 31 Jul. 2015
Laboratory Department
Lab Volumes
Jan
Feb
Mar
Apr
May
Jun
Jul
Jan
Feb
Mar
Apr
May
Jun
Jul
Lab Tests
Inpatient
159
207
152
121
279
176
201
85
50
148
161
142
85
114
Lab Tests
Outpatient
78
63
93
72
89
63
53
59
66
71
85
64
28
45
Inpatient Lab Volumes
300
250
200
Test 2014
Tests 2015
150
100
50
Ju
l
Fe
b
M
ar
A
pr
M
ay
Ju
n
Ja
n
0
Financial Statement
for
Orthopedics
Financial Statement
For
Payer A
Financial Statement
For
Payer A
Orthopedics
Case Exercise

Analyze the following hospital financial
statement.

What is(are) the primary problem(s) to be
solved?

How would you solve them?
Step #1
Produce a complete timely
accurate financial
statement.
Hart International Hospital
Balance Sheet as of Dec. 31, 2014
Produced Jan. 25, 2015
Dec. 2014
Dec. 2013
173,000
20,655,000
71,559,000
2,050,000
94,437,000
93,000,000
187,437,000
7,906,000
8,556,000
64,762,000
2,688,000
83,912,000
70,000,000
153,912,000
6,314,000
10,720,000
17,034,000
40,866,000
57,900,000
7,153,710
4,620,000
11,773,710
17,230,000
29,003,710
129,537,000
124,908,290
Current Assets
Cash and Bank
Investments
Accounts Receivable
Inventory
Total Current Assets
Property and Equipment
Total Assets
Current Liabilities
Payables
Notes payable Current
Total Current Liabilities
Long Term Liabilities
Total Liabilities
Fund Balance
Hart International Hospital
Statement of Financial Activity
Dec. 2014
Budget
Dec. 2013
Revenues
Inpatient Revenue
Professional Fees
Outpatient Revenue
Donation Income
Investment Income
Other Income
Total Revenues
14,676,000
3,620,000
13,128,000
5,600
127,400
434,000
31,991,000
29,578,000
0
17,800,000
0
1,000,000
0
48,378,000
31,296,000
7,582,000
12,916,000
11,760
-284,000
0
51,521,760
Expenses
Salaries and Wages
Contract Services
Outside Medical Providers
Food, Drugs, and Supplies
Administrative Expenses
Maintainance Expenses & Rent
Legal & Insurance
Depreciation
Charity/Discounts
Christmas Gifts
Utilities
Travel Expenses
Employee Medical
Retirement
Advertising
Interest
Security
Audit Fees
Total Expenses
14,256,000
1,288,000
1,870,000
7,086,000
1,268,000
632,000
1,416,000
2,190,000
1,706,000
552
791,200
87,400
470,000
278,000
64,000
5,866,000
354,000
392,000
40,015,152
17,028,000
1,725,000
2,152,000
8,920,000
1,186,000
620,000
520,000
2,500,000
750,000
0
1,076,000
0
540,000
708,000
0
5,102,000
480,000
392,000
43,699,000
16,484,000
2,484,000
926,000
11,962,000
1,248,000
702,000
1,222,000
2,538,000
1,792,000
0
1,214,000
82,500
604,000
58,298
54,230
1,680,000
438,000
390,000
43,879,028
Net Income(loss)
-8,024,152
4,679,000
7,642,732
Working Capital
Current Assets
Current Liabilities
94,437,000
17,034,000
Total Working Capital
77,403,000
Recommended Working Capital
20% of Operating Expense (Prior Year)
Percentage to Recommendation
8,775,806
882.00%
Notes
Note 1: Cash and Bank
Cash On Hand
Bank/Checking Accounts
Interest Bearing Account
Total Cash and Bank
Dec. 2014
5,000
168,000
0
173,000
Dec. 2013
15,000
500,000
7,391,000
7,906,000
Note 2: Investments
Lending Agency Reserve
Other Investments
Total Investments
20,655,000
0
20,655,000
2,000,000
6,556,000
8,556,000
20,000
5,000
71,534,000
0
71,559,000
10,000
6,000
64,746,000
0
64,762,000
120,000
6,194,000
6,314,000
0
7,153,710
7,153,710
10,720,000
4,620,000
40,866,000
17,230,000
Note 3: Accounts Receivable
Employees
SDA Organizations
Government Health Insurance
Less: Allowance For Doubtful Accounts
Total Accounts Receivable
Note 4: Accounts Payables
Bank Overdraft
Trade Payables
Total Accounts Payable
Note 5: Notes Payable Current
Bank Loan
Note 6: Long Term Liabilities
Bank Loan
Step 2.
Explain the
differences.
Hart International Hospital
Balance Sheet as of Dec. 31, 2014
Dec. 2014
Dec. 2013
173,000
20,655,000
71,559,000
2,050,000
94,437,000
93,000,000
187,437,000
7,906,000
8,556,000
64,762,000
2,688,000
83,912,000
70,000,000
153,912,000
6,314,000
10,720,000
17,034,000
40,866,000
57,900,000
7,153,710
4,620,000
11,773,710
17,230,000
29,003,710
129,537,000
124,908,290
Current Assets
Cash and Bank
Investments
Accounts Receivable
Inventory
Total Current Assets
Property and Equipment
Total Assets
Current Liabilities
Payables
Notes payable Current
Total Current Liabilities
Long Term Liabilities
Total Liabilities
Fund Balance
Hart International Hospital
Statement of Financial Activity
Dec. 2014
Budget
Dec. 2013
Revenues
Inpatient Revenue
Professional Fees
Outpatient Revenue
Donation Income
Investment Income
Other Income
Total Revenues
14,676,000
3,620,000
13,128,000
5,600
127,400
434,000
31,991,000
29,578,000
0
17,800,000
0
1,000,000
0
48,378,000
31,296,000
7,582,000
12,916,000
11,760
-284,000
0
51,521,760
Expenses
Salaries and Wages
Contract Services
Outside Medical Providers
Food, Drugs, and Supplies
Administrative Expenses
Maintainance Expenses & Rent
Legal & Insurance
Depreciation
Charity/Discounts
Christmas Gifts
Utilities
Travel Expenses
Employee Medical
Retirement
Advertising
Interest
Security
Audit Fees
Total Expenses
14,256,000
1,288,000
1,870,000
7,086,000
1,268,000
632,000
1,416,000
2,190,000
1,706,000
552
791,200
87,400
470,000
278,000
64,000
5,866,000
354,000
392,000
40,015,152
17,028,000
1,725,000
2,152,000
8,920,000
1,186,000
620,000
520,000
2,500,000
750,000
0
1,076,000
0
540,000
708,000
0
5,102,000
480,000
392,000
43,699,000
16,484,000
2,484,000
926,000
11,962,000
1,248,000
702,000
1,222,000
2,538,000
1,792,000
0
1,214,000
82,500
604,000
58,298
54,230
1,680,000
438,000
390,000
43,879,028
Net Income(loss)
-8,024,152
4,679,000
7,642,732
Working Capital
Current Assets
Current Liabilities
94,437,000
17,034,000
Total Working Capital
77,403,000
Recommended Working Capital
20% of Operating Expense (Prior Year)
Percentage to Recommendation
8,775,806
882.00%
IAD Working Policy P 37
“Working Capital shall be defined as the
amount of current assets above the total of
current liabilities”
Health Care Institutions-20 percent of the
operating expenses of the latest complete
fiscal year, or for interim statements, the
latest 12 actual operating expense, plus
allocated funds”
The Meaning of
Working Capital

Current Liabilities will be paid out of current
assets.

Current liabilities are debts to be paid within one
year.

Current assets are assets to be realized in cash
or used up within one year
Hart International Hospital
Balance Sheet as of Dec. 31, 2014
Dec. 2014
Dec. 2013
173,000
20,655,000
71,559,000
2,050,000
94,437,000
93,000,000
187,437,000
7,906,000
8,556,000
64,762,000
2,688,000
83,912,000
70,000,000
153,912,000
6,314,000
10,720,000
17,034,000
40,866,000
57,900,000
7,153,710
4,620,000
11,773,710
17,230,000
29,003,710
129,537,000
124,908,290
Current Assets
Cash and Bank
Investments
Accounts Receivable
Inventory
Total Current Assets
Property and Equipment
Total Assets
Current Liabilities
Payables
Notes payable Current
Total Current Liabilities
Long Term Liabilities
Total Liabilities
Fund Balance
How valid are the current assets?
Will they be cash within the year?

Cash and bank?

Investments?

Accounts Receivable?

Inventory?
Cash and Bank
Notes
Note 1: Cash and Bank
Cash On Hand
Bank/Checking Accounts
Interest Bearing Account
Total Cash and Bank
Note 2: Investments
Lending Agency Reserve
Other Investments
Total Investments
Note 3: Accounts Receivable
Employees
SDA Organizations
Government Health Insurance
Less: Allowance For Doubtful Accounts
Total Accounts Receivable
Note 4: Accounts Payables
Bank Overdraft
Trade Payables
Total Accounts Payable
Note 5: Notes Payable Current
Bank Loan
Note 6: Long Term Liabilities
Bank Loan
Dec. 2014
5,000
168,000
0
173,000
Dec. 2013
15,000
500,000
7,391,000
7,906,000
20,655,000
0
20,655,000
2,000,000
6,556,000
8,556,000
20,000
5,000
71,534,000
0
71,559,000
10,000
6,000
64,746,000
0
64,762,000
120,000
6,194,000
6,314,000
0
7,153,710
7,153,710
10,720,000
4,620,000
40,866,000
17,230,000
Cash and Bank
Valid
Value = 173,000
Investments
Notes
Note 1: Cash and Bank
Cash On Hand
Bank/Checking Accounts
Interest Bearing Account
Total Cash and Bank
5,000
168,000
0
173,000
15,000
500,000
7,391,000
7,906,000
Note 2: Investments
Lending Agency Reserve
Other Investments
Total Investments
20,655,000
0
20,655,000
2,000,000
6,556,000
8,556,000
20,000
5,000
71,534,000
0
71,559,000
10,000
6,000
64,746,000
0
64,762,000
120,000
6,194,000
6,314,000
0
7,153,710
7,153,710
10,720,000
4,620,000
40,866,000
17,230,000
Note 3: Accounts Receivable
Employees
SDA Organizations
Government Health Insurance
Less: Allowance For Doubtful Accounts
Total Accounts Receivable
Note 4: Accounts Payables
Bank Overdraft
Trade Payables
Total Accounts Payable
Note 5: Notes Payable Current
Bank Loan
Note 6: Long Term Liabilities
Bank Loan
Investments
What will the bank let us do with these
funds?
Maybe pay current payable on the bank
loan.
Value = 0
Accounts Receivable
Notes
Note 1: Cash and Bank
Cash On Hand
Bank/Checking Accounts
Interest Bearing Account
Total Cash and Bank
5,000
168,000
0
173,000
15,000
500,000
7,391,000
7,906,000
Note 2: Investments
Lending Agency Reserve
Other Investments
Total Investments
20,655,000
0
20,655,000
2,000,000
6,556,000
8,556,000
20,000
5,000
71,534,000
0
71,559,000
10,000
6,000
64,746,000
0
64,762,000
120,000
6,194,000
6,314,000
0
7,153,710
7,153,710
10,720,000
4,620,000
40,866,000
17,230,000
Note 3: Accounts Receivable
Employees
SDA Organizations
Government Health Insurance
Less: Allowance For Doubtful Accounts
Total Accounts Receivable
Note 4: Accounts Payables
Bank Overdraft
Trade Payables
Total Accounts Payable
Note 5: Notes Payable Current
Bank Loan
Note 6: Long Term Liabilities
Bank Loan
CHURCH Working Policy
O 15
“The Accounts Receivable shown in the
annual Financial Statement shall not be in
excess of:
Medical Institutions – 6% of annual patients
business (not including insurance
carriers)”
Asset Efficiency
Receivables Analysis
 Receivable
 Days’
Turnover
uncollected
Receivable Turnover
Yearly Net Patient Revenue
---------------------------------Average Accounts Receivable
Days In Patient Accounts
Receivable
365
--------------------------------------Net Patient Receivable Turnover
Hart International Hospital
Statement of Financial Activity
Dec. 2014
Budget
Dec. 2013
Revenues
Inpatient Revenue
Professional Fees
Outpatient Revenue
Donation Income
Investment Income
Other Income
Total Revenues
14,676,000
3,620,000
13,128,000
5,600
127,400
434,000
31,991,000
29,578,000
0
17,800,000
0
1,000,000
0
48,378,000
31,296,000
7,582,000
12,916,000
11,760
-284,000
0
51,521,760
Expenses
Salaries and Wages
Contract Services
Outside Medical Providers
Food, Drugs, and Supplies
Administrative Expenses
Maintainance Expenses & Rent
Legal & Insurance
Depreciation
Charity/Discounts
Christmas Gifts
Utilities
Travel Expenses
Employee Medical
Retirement
Advertising
Interest
Security
Audit Fees
Total Expenses
14,256,000
1,288,000
1,870,000
7,086,000
1,268,000
632,000
1,416,000
2,190,000
1,706,000
552
791,200
87,400
470,000
278,000
64,000
5,866,000
354,000
392,000
40,015,152
17,028,000
1,725,000
2,152,000
8,920,000
1,186,000
620,000
520,000
2,500,000
750,000
0
1,076,000
0
540,000
708,000
0
5,102,000
480,000
392,000
43,699,000
16,484,000
2,484,000
926,000
11,962,000
1,248,000
702,000
1,222,000
2,538,000
1,792,000
0
1,214,000
82,500
604,000
58,298
54,230
1,680,000
438,000
390,000
43,879,028
Net Income(loss)
-8,024,152
4,679,000
7,642,732
Hart International Hospital
Balance Sheet as of Dec. 31, 2014
Dec. 2014
Dec. 2013
173,000
20,655,000
71,559,000
2,050,000
94,437,000
93,000,000
187,437,000
7,906,000
8,556,000
64,762,000
2,688,000
83,912,000
70,000,000
153,912,000
6,314,000
10,720,000
17,034,000
40,866,000
57,900,000
7,153,710
4,620,000
11,773,710
17,230,000
29,003,710
129,537,000
124,908,290
Current Assets
Cash and Bank
Investments
Accounts Receivable
Inventory
Total Current Assets
Property and Equipment
Total Assets
Current Liabilities
Payables
Notes payable Current
Total Current Liabilities
Long Term Liabilities
Total Liabilities
Fund Balance
Hart International Hospital
Days In Accounts Receivables
Yearly Patient Revenue
Average Accounts Reveivable
Net Patient Receivable Turnover
Days In Patient Accounts Receivable
Days in Accounts Receivables
27,804,000
68,160,500
0.41
Turnover/365
895
Past Performance
Days Uncollected
1000
900
800
700
600
500
400
300
200
100
0
Days
Uncollected
Standard
2009 2010 2011 2012 2013
Allowance for doubtful accounts

90 days
0%

91 days to 180
25%

181 days to 270
50%

271 days to 365 days 75%

Over 366 days
100%
Accounts Receivable
What are the expectations that these funds
will be collected within the next year?
Value = 10,000,000
Inventory

How confident are you in your inventory?

Is it automated?

Do you have an audited manual system?
Value = 0
Hart International Hospital
Balance Sheet as of Dec. 31, 2014
Dec. 2014
Dec. 2013
173,000
20,655,000
71,559,000
2,050,000
94,437,000
93,000,000
187,437,000
7,906,000
8,556,000
64,762,000
2,688,000
83,912,000
70,000,000
153,912,000
6,314,000
10,720,000
17,034,000
40,866,000
57,900,000
7,153,710
4,620,000
11,773,710
17,230,000
29,003,710
129,537,000
124,908,290
Current Assets
Cash and Bank
Investments
Accounts Receivable
Inventory
Total Current Assets
Property and Equipment
Total Assets
Current Liabilities
Payables
Notes payable Current
Total Current Liabilities
Long Term Liabilities
Total Liabilities
Fund Balance
True Working Capital
Modified Current assets
Cash and Bank
Investments
Accounts Receivable
Inventory
173,000
0
1,000,000
0
Total
1,173,000
Modified Current Liabilities
Payables
Notes Payable Current
Total
True Working Capital
20% of operating Expenses (prior year)
Working Capital Excess (Deficit)
6,314,000
0
6,314,000
-5,141,000
7,260,898
-12,401,898
Financial Statement Analysis
 Cash
 Accounts
345,000
Receivable
 Debt
 Net
Income(loss)
567,000
3,654,872
285,980
Financial Statement Analysis
Standards
 Rule-of-thumb
Working capital--20% of the operating expenses
of the latest completed fiscal year.
 Past
performance Budget, one year ago and the last 5
years of financial data are we getting better, staying the same or worse?
 Industry
norms What is the average for other hospitals of our
size and similar environment? 132 different ratios
Financial Statement Analysis
Ratios

Liquidity

Profitability

Debt

Asset Efficiency
Step 3
Calculate ratios and
compare.
Liquidity
Do we have any money?
%
of Required Working Capital
 Current
Ratio
 Modified
-- Current Assets/Current Liabilities
Current Ratio – True Current
Assets/True Current Liabilities
Working Capital
Current Assets
Current Liabilities
94,437,000
17,034,000
Total Working Capital
77,403,000
Recommended Working Capital
20% of Operating Expense (Prior Year)
Percentage to Recommendation
8,775,806
882.00%
True Working Capital
Modified Current assets
Cash and Bank
Investments
Accounts Receivable
Inventory
173,000
0
1,000,000
0
Total
1,173,000
Modified Current Liabilities
Payables
Notes Payable Current
Total
True Working Capital
20% of operating Expenses (prior year)
Working Capital Excess (Deficit)
6,314,000
0
6,314,000
-5,141,000
7,260,898
-12,401,898
Current Ratio
Current Assets
Current Liabilities
Hart International Hospital
Current Ratio
94,437,000
17,034,000
Equal
5.54
Current Ratio
2013 Almanac of Hospital Financial and Operating Indicators
OptumInsight
Median Values
Revenues < $10 Million
2.11
Rural Hospitals
2.24
Less Than 100 Beds
2.18
Hart International
5.54
Your Hospital???
Modified Current Ratio
Modified Current Assets
1,173,000
Modified Current Liabilities 6,314,000
Equal
.186
Current Ratio
2013 Almanac of Hospital Financial and Operating Indicators
OptumInsight
Median Values
Revenues < $10 Million
2.11
Rural Hospitals
2.24
Less Than 100 Beds
2.18
Hart International
.186
Your Hospital???
Profitability
Are we making money?

Total Margin =
Excess Revenues over Expenses
Total Revenue
*
100
Hart International Hospital
Total Margin

Excess Revenues Over Expenses = -8,024,152
Total revenue
= 31,991,000

-8,024,152 / 31,991,000
= -.25

-.25 / 100
= -.00251

Debt
Can we borrow money?
Equity Financing
Proportion of total assets that have been financed
by non-debt sources.
“Creditors usually view a hospital with a high
Equity Financing Ratio favorably because it
means less debt used and therefore less
likelihood of insolvency”
Almanac of Hospital Financial and Operating Indicators p 57
Equity Financing
(Net Assets / Total Assets) / 100
(129,584,927/187,486,701) = .691169
.691169 / 100 = 69.1169%
Equity Financing
2013 Almanac of Hospital Financial and Operating Indicators
OptumInsight
Median Values
Revenues < $10 Million
54.7
Rural Hospitals
59.3
Less Than 100 Beds
58.6
Hart International
69.0
Hart International
54.0
Your Hospital???
Asset Efficiency:
How are we doing managing
what we have?
 Days
In Receivables
Days In Patient Accounts
Receivable
2013 Almanac of Hospital Financial and Operating Indicators
OptumInsight
Median Values
Revenues < $10 Million
42 Days
Rural Hospitals
35 Days
Less Than 100 Beds
36 Days
Hart International
895 Days
Your Hospital???
Hart International Hospital
Statement of Financial Activity
Dec. 2014
Budget
Dec. 2013
Revenues
Inpatient Revenue
Professional Fees
Outpatient Revenue
Donation Income
Investment Income
Other Income
Total Revenues
14,676,000
3,620,000
13,128,000
5,600
127,400
434,000
31,991,000
29,578,000
0
17,800,000
0
1,000,000
0
48,378,000
31,296,000
7,582,000
12,916,000
11,760
-284,000
0
51,521,760
Expenses
Salaries and Wages
Contract Services
Outside Medical Providers
Food, Drugs, and Supplies
Administrative Expenses
Maintainance Expenses & Rent
Legal & Insurance
Depreciation
Charity/Discounts
Christmas Gifts
Utilities
Travel Expenses
Employee Medical
Retirement
Advertising
Interest
Security
Audit Fees
Total Expenses
14,256,000
1,288,000
1,870,000
7,086,000
1,268,000
632,000
1,416,000
2,190,000
1,706,000
552
791,200
87,400
470,000
278,000
64,000
5,866,000
354,000
392,000
40,015,152
17,028,000
1,725,000
2,152,000
8,920,000
1,186,000
620,000
520,000
2,500,000
750,000
0
1,076,000
0
540,000
708,000
0
5,102,000
480,000
392,000
43,699,000
16,484,000
2,484,000
926,000
11,962,000
1,248,000
702,000
1,222,000
2,538,000
1,792,000
0
1,214,000
82,500
604,000
58,298
54,230
1,680,000
438,000
390,000
43,879,028
Net Income(loss)
-8,024,152
4,679,000
7,642,732
Step #4
Determine the Problem(s).
What is(are) the primary
problem(s) at Hart
International Hospital?
Problems

No Cash?

Not enough revenue?

Declining Inpatient Revenue

Not collecting receivables
Hart International Hospital
45,000,000
40,000,000
35,000,000
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
0
Inpatient
Revenue
2008 2009 2010 2011 2012
Past Performance
Days Uncollected
1000
900
800
700
600
500
400
300
200
100
0
Days
Uncollected
Standard
2009 2010 2011 2012 2013
Now What?
10 WAYS TO
IMPROVE YOUR FINANCES
Contract
Compliance
Special Service Lines
Lure The Physician
Donations
Watch Inflation
10 WAYS TO
IMPROVE YOUR FINANCES
Right
Size The Organization
Use Flex Staffing
Control Overtime
Manage Supplies/Medicines
Fewer Might Be Better
Sharing and questions

Which Strategies did you select?

What barriers are there to implementing your
strategies?

How can AHI assist you?

Are you going to do it?