Children's hospitals face similar financial challenges as general acute-care hospitals — shrinking reimbursements, managing hospital salaries, providing safe and effective care in a cost-effective manner. However, because children's hospitals treat a specific, younger population demographic and do not experience the country's largest payor (Medicare), they must manage more from the commercial payor side and be more cognizant of allocating their limited resources, among other unique situations.
For La Rabida Children's Hospital — a 49-bed hospital in Chicago that is a partner with the University of Chicago Medical Center and Children's Memorial Hospital — its bottom line is dwarfed by several other hospitals, children's hospitals included. La Rabida's gross patient revenue last year was around $49.3 million, and its total revenue last year was around $60.8 million. However, like many community hospitals, the financial pressures of children's hospitals — no matter how big or how small — are just as complex, especially in the wake of Medicaid Recovery Auditors and healthcare reform. Here, La Rabida CFO Mark Renfree gives four thoughts on finances from the perspective of a small children's hospital.
Q: What are some ways that a children's hospital can remain solvent in today's economic environment?
Mark Renfree: These are tough economic times for everyone, and children's hospitals are not immune to the financial pressures faced by many families. We have responded by redefining our needs versus our wants, reducing discretionary spending, implementing more efficient processes and optimizing technology.
Q: How will La Rabida prepare for Medicaid RACs, especially considering this is the first time La Rabida has had to deal with RACs?
MR: We have taken a number of steps, including expansion of our quality and corporate compliance department and an increased number and scope of internal audits. We also feel the external financial audits, extensive preparation for Joint Commission re-accreditation and our recent implementation of a new electronic health record system have all served to prepare us well for RAC audits.
Q: How would you define financial and clinical success at La Rabida?
MR: As moving targets, you will strive for knowing that you will always need to improve.
Q: According to a Kaiser Health News report from this September, executives at the largest and most profitable children's hospitals have some of the highest compensation packages in the hospital sector, as most make more than $1 million in salary and benefits annually. How do children's hospitals justify this financially?
MR: As a very small children's hospital, we can't afford to pay executives those kinds of dollars. We benchmark ourselves against other quality healthcare institutions of our own size and pay competitive wages to attract and retain good talent at all levels of the organization. We pride ourselves on being good financial stewards of the resources that are available to us.
For La Rabida Children's Hospital — a 49-bed hospital in Chicago that is a partner with the University of Chicago Medical Center and Children's Memorial Hospital — its bottom line is dwarfed by several other hospitals, children's hospitals included. La Rabida's gross patient revenue last year was around $49.3 million, and its total revenue last year was around $60.8 million. However, like many community hospitals, the financial pressures of children's hospitals — no matter how big or how small — are just as complex, especially in the wake of Medicaid Recovery Auditors and healthcare reform. Here, La Rabida CFO Mark Renfree gives four thoughts on finances from the perspective of a small children's hospital.
Q: What are some ways that a children's hospital can remain solvent in today's economic environment?
Mark Renfree: These are tough economic times for everyone, and children's hospitals are not immune to the financial pressures faced by many families. We have responded by redefining our needs versus our wants, reducing discretionary spending, implementing more efficient processes and optimizing technology.Q: How will La Rabida prepare for Medicaid RACs, especially considering this is the first time La Rabida has had to deal with RACs?
MR: We have taken a number of steps, including expansion of our quality and corporate compliance department and an increased number and scope of internal audits. We also feel the external financial audits, extensive preparation for Joint Commission re-accreditation and our recent implementation of a new electronic health record system have all served to prepare us well for RAC audits.
Q: How would you define financial and clinical success at La Rabida?
MR: As moving targets, you will strive for knowing that you will always need to improve.
Q: According to a Kaiser Health News report from this September, executives at the largest and most profitable children's hospitals have some of the highest compensation packages in the hospital sector, as most make more than $1 million in salary and benefits annually. How do children's hospitals justify this financially?
MR: As a very small children's hospital, we can't afford to pay executives those kinds of dollars. We benchmark ourselves against other quality healthcare institutions of our own size and pay competitive wages to attract and retain good talent at all levels of the organization. We pride ourselves on being good financial stewards of the resources that are available to us.
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