Hospitals of all sizes have instituted hiring freezes and are putting off creditors in order to make their monthly payrolls.
Blue Hill Memorial Hospital in Blue Hill, Me., recently lost its chief financial officer and has postponed filling the position in order to pay bills.
To keep the 25-bed hospital running smoothly, other employees at the facility and at Eastern Maine Healthcare Systems have taken on the CFO's responsibilities.
At a time when money (or the lack of it) is a central issue for many hospitals, a big question is whether the hospital CFO is expendable.
Not only is outpatient volume down, but patients are paying more out of pocket and postponing elective procedures. Factor in delayed payments from Medicare, and many hospitals are having trouble bringing in the revenues they need to stay afloat.
"A small hospital with a strong controller and/or a CEO with the right background might get away with eliminating the CFO, but I can't imagine that as a long-term solution," said Don Peak, CFO at CPC Health Systems, LLC.
Blue Hill Memorial intends to take up to a year to replace its CFO and is looking creatively at the position, said Erik Steele, DO, interim chief operating officer at the rural Maine facility.
Options include sharing a CFO with another small hospital, hiring a part-time CFO or hiring someone who can cover both CFO and COO duties on a part-time basis.
"I know of one small hospital of only 15 beds where the CEO handles the CFO duties," said T.T Mitchell of the T.T. Mitchell Consulting firm.
"Maybe if the CEO was formerly a CFO it might work, but I'd hate to be the one taking over the responsibility when I have other duties to perform," Mitchell said.
Blue Hill isn't the only hospital in Maine struggling to pay its bills. There is a $400 million outstanding debt in state and federal funds to Maine hospitals.
Blue Hill is owed as much as $3 million for fiscal years 2006-2008 and has to clear $250,000 a month in order to break-even.
"You could pay a good CFO a fortune and they'd still be worth three times as much," said Steele. "A CFO is absolutely indispensable. Every single cent in cost duplication and efficiency is coming out of somebody's hide."
Blue Hill further reduced its 340-person staff to avoid bankruptcy, making late January cuts in clinical, administrative and support positions.
The hospital also sold investment stocks to make payroll.
"Our future is to reinvent ourselves cost effectively and cost efficiently," Steele said. "If we don't do that, I'm not sure we'll survive."