Those who adapt survive.
For years Andrew’s Hospice CFO training course has contained the following exam question: “When Medicare cuts hospice rates, what three things will happen?” Hospice visionaries and pioneers are not surprised by cuts to Medicare reimbursements. Nor are they alarmed. Good hospices will adjust their models and continue to provide stellar care and build reserves. Lesser hospices will limp through. Some will fail.
Sequestration cuts don’t appear to be going away. And they don’t spell doom for hospice. Wise leaders will continue to fund the mission – keeping The Visit the organization’s highest priority. They design the hospice around it. It’s the reason for their existence, the prime directive, the sacrament of the hospice movement. They practice it, perfect it. They strive toward perfect visits with zero variation in quality. Peripheral programs may be impacted by cuts, but never the Hospice Visit.
Wise leaders also keep their eyes on the numbers. Every cost is scrutinized, questioned, interviewed for fitness. Does the cost add value to the visit? Does it advance the sustainability of the hospice? If not, it doesn’t belong. That’s the thinking that leads to double-digit profit in hospice. And profit, though a profanity in corners of the non-profit world, keeps the hospice doors open in hard times. Keeps the mission alive.
The Model is Multi-View’s scalable business map, a financial plan, for hospices. The workbooks are free to Multi-View Network Clients and are available in our Library. And there’s nothing you need in difficult times more than a plan.
And the answers to Andrew’s exam question: The three things that will happen when Medicare cuts hospice rates are
- There will be a decrease in the number of new hospices
- Financially weak hospices will fold or seek merger partners
- Financially competent hospices will adjust their models
~ Bill Taylor, CPA