The hospital has to change its strategies in order to improve its overall financial performance. These strategies include: spending on accounting systems to cut costs, increasing the accounts receivable collections, or increasing legitimacy with stakeholders and donors; improving efficiency through professional administration; spending on advertising to increase revenues through increased market share and premium prices; and offsetting patient care losses with substantial net income from sources not directly connected to patient care.
After convening with the Middlefield Hospital management team, we were able to identify the core facts that my recommendations were built on. Medicare is responsible for 37 percent of all community hospital revenues, and reimbursement for capital expenses constitutes only about 7 percent of this revenue. In addition, the patient population of Middlefield Hospital is comprised of more and more Medicare, Medicaid, and uninsured patients and fewer patients have commercial insurance. In order to increase the net income the hospital should invest in advertising. Furthermore, advertising is likely to yield significant