Distressed Hospital Management

A rural Pennsylvania 107-bed hospital with net revenue of $72M had lost more than $30M over the prior 10 consecutive years. Further, the organization had lost Joint Commission (JC) accreditation and was considering bankruptcy protection. David Kobis was tasked with leading a financial and operational turnaround of the hospital, as well as the merger and integration of the facility with another hospital in New York state. Positive operating margins were achieved within six months and JC accreditation was regained within 18 months. Specific turnaround initiatives and changes included: 

• Right-sizing the labor force through the reduction of more than 100 FTEs (15% of workforce) with no reduction in programs or services, restructuring vendor contracts, transitioning GPOs, and converting all free-standing physician practices to provider-based status. 
• Restructured 95-bed skilled nursing facility (SNF) by changing leadership, boosting occupancy by 30%, expanding Medicare census from 5% to 17%, and raising case mix by 45% (from .85 to 1.20). Overall results increased revenue by $2M, eliminated a $700,000 operating deficit, and improved overall Quality Star Rating from two to four stars. 
• Improved financial and operating results of a 25-provider multispecialty medical group by restructuring provider contracts, terminating poor performing providers, closing low productivity offices and centralizing clinics, achieving rural health clinic designation and enhanced reimbursement from CMS, and increasing provider productivity. Improved financial outcome by more than $1.5M annually. 
• Recruiting more than 20 physicians and providers to an isolated, rural area in NW Pennsylvania.
• Restructured home health and hospice program turning a $300,000 operating loss into a $100,000 surplus within two years. Changes included new leadership, improved oversight and accountability, workforce redesign, and improved staff productivity.