Barton basks in healthy financial climate
At a time when many medical centers are closing or cutting back, Barton Memorial Hospital’s aggressive collection and savings efforts during the last year have paid off in a big way.
The South Lake Tahoe-based hospital has cut in half its average payment collection rate — from 125 days to 55. It has also reduced by 50 percent its unpaid patient bills, also known as uncompensated care.
Barton added customer service personnel to help collect on bills, with six people now solely dedicated to collections.
The hospital has even called in reinforcements — case workers — to help patients complete forms required for recipients to receive MediCal, the state government’s insurance program for the poor.
“We’ve tried to reduce the intimidation factor. We have found the longer we carry accounts receivable, the harder it is to get the full amount,” said Barton Chief Financial Officer Richard Derby, who’s logged 27 years of experience working on hospital bottom lines. “We always bill the insurance company first, but sometimes insurers delay.”
Like banks, insurance companies can make millions holding onto their money to collect interest, Derby said.
Given this tendency coupled with high capital costs, many hospitals have trouble staying afloat.
“Yes, hospitals have faced trying times in the last few years,” he said.
Inflation has continued to raise the cost of doing business, but Derby said insurers are barely catching on to the notion that hospitals are operating on leaner than ever margins.
In part a reflection of Barton’s fixed expenses, its $9 million debt level is dwarfed by $45 million in equity, he reported.
Barton’s promising financial standing has also been attributed to other savings efforts, such as joining a purchasing pool to buy services like office supplies. It’s saved about $1 million in so doing, Derby added.
The savings comes back in rewards to its employees, which recently received their largest bonus — referred to as variable pay. Barton employs 914 people.
“If the employees do a better job of manning their resources, the action comes back to them,” he said.
Barton Home Health aide Heide Manderschied can thank her employer for the bonus before winter starts to bear down.
She bought a $400 set of snow tires for her vehicle with the extra money, which usually amounts to 2 to 3 percent of the employee’s salary. This latest bonus was 3 to 4 percent.
“The bonuses are definitely an incentive. It makes you want to work there,” Manderschied said.
— Susan Wood can be reached at (530) 542-8009 or via e-mail at email@example.com
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