Financially Troubled Hospital Can't Afford to Improve

Kenneth Hall Regional Hospital has lost an average of $3 million per year for the past 5 years, according to a recent article in the St. Louis Post.

When hospitals struggle financially, a downward spiral frequently occurs. Financial losses make it difficult to upgrade technology and keep the hospital looking attractive. This, in turn, makes it hard to attract physicians and their patients; a circumstance Kenneth Hospital knows all too well.

Kenneth Hospital is a 161 bed facility, but on an average day only about a quarter of those beds are filled. In 2006, federal health inspectors found that the hospital's on-call trauma surgeons failed to respond within the mandated 30-minute time frame.

Mike McManus, COO for the foundation which owns Kenneth Hospital, blames inadequate finances for the hospital's decline in treatment. "We acknowledge that some of our results are not where they should be, but our hospitals do not have cash reserves. What's happened in the past basically is we've repaired things when they break, but we don't have the resources to improve."

McMannus sees a merger of services with its other facility, Touchette Regional Hospital, as only a short term solution for both hospitals' chance of survival.

Hospitals finding themselves in a similar financial crisis should strongly consider Medical Accounts Receivable (MAR) Funding as a solution. MAR Funding is a strategic way to generate working capital. With MAR Funding, a hospital's account receivables can be converted to cash to keep up with ever-changing medical technology, purchase new equipment, invest in additional personnel, and ensure a hospital's financial survival.