Cash Flow Growth Through A Pandemic With Reduced Volume, How Can That Happen?

In 2020, Texican in partnership with its client was able to achieve something remarkable in the industry that most hospital financial executives could only hope for during the COVID-19 pandemic – growth in net cash. Even with significant declines in charges, there were no layoffs or need for additional debt to bolster cash reserves. This is in stark contrast to the industry that saw a decline in operating margins of 55.6%. #1

The Client

Texican engaged with a large regional $750M plus non-profit healthcare organization located in the South to transform its Revenue Cycle Operations (RCO) and implement process improvement/standardization across the entity. The system consists of seven acute care facilities ranging in size from a critical access site (25 beds) to a flagship community hospital (475 beds) as well as supporting a teaching hospital and physician groups/offices. The journey began by focusing on governance, collaboration and RCO transformation to optimize workflow and enable operational excellence. As we entered Spring of 2020, these improvements provided a strong foundation to help our client manage through the impact of the COVID-19 pandemic and plunging patient volumes. Even with this impact on charges, cash in the fiscal year exceeded the previous year by $3M. The cash impact would have been $26M if not for the $23M decline caused by the COVID-19 shut down.

The Results

COVID Impacts	Texican Client	Health Sistem (#2 & #3)	Large IDN
Cash Flow Hit
Layoffs
Leveraged Credit
Margin Growth

“Texican exceeded all deliverables from their initial assessment, including significant increases in cash & recurring net revenue”

--Chief Financial Officer

Large Regional Health System

Texican Inc. specializes in achieving positive cash results through revenue cycle operations transformation. Established in 1991, we have been focused on delivering sustainable cash flow and operational improvement year over year. We have produced an equivalent average of an extra month of cash collections per engagement. As well as develop the performance metrics to continue the trend. Based on our experience clients achieve incremental cash improvement of $12 for every $1 spent on the engagement. For more information, please contact Juliana Costa, at Juliana_Costa@texicaninc.com or at 850-225-9376.

Reference:

# 1 Kaufman Hall study
# 2 May 2020 AHA article “Hospitals and Health Systems Face Unprecedented Financial Pressures Due to COVID-19” #3 July 2020 AHA article “New AHA Report Finds Losses Deepen for Hospitals and Health Systems Due to COVID-19).