The Unlearned Lessons of Failing Community Health Centers – Part 2

The Unlearned Lessons of Failing Community Health Centers – Part 2
The Evolution of CHC Financial Statements into a Dark Art –

As we continue to address Community Health Centers’ central role in providing primary health care to the unemployed, underemployed, and part-time employed who are uninsured or underinsured, we need to stay alert to these issues:

Healthcare in America is not a looming crisis.
It is not a pending catastrophe.
American healthcare is in a state of crisis now.

Healthcare for the uninsured and underinsured is a dark waltz with disaster.

The way this can be dealt with immediately is through local Community Health Centers that are well-led, well-managed, and well-financed.

If Community Health Centers are vital to resolving the health crisis, what can Community Health Center Board members do to help their Center?

Our sense is that Boards can insist that their Executive Director immediately overcome the following four issues:

1. The lack of transparency.
2. The evolution of community health center financial statements into a dark art.
3. Financial statements as fairytales.
4. The failure of the executive director to believe, despite their mission, and demonstrate through measurable behaviors, that CHCs are established to serve all the medically underserved in its area.

Yesterday we discussed: 1. The Lack of Transparency.

Today we address:

2. The Evolution of CHC Financial Statements into a Dark Art –

Examples:
§ Consecutive monthly Board meetings without a substantive discussion of:
1. Accounts Receivables (A/R) and A/R aging

2. The Executive Director’s report on what the community health center is currently doing

3. The Board questioning the Executive Director on what the center has stopped doing

§ The monthly financial statements submitted to the Centers’ Board consistently report a steady and smooth growth.

Questions to ask
Can the Board and ED understand the complexity of its financial statements?

Can they articulate the complexity of the CHC financial structure?

Can they articulate the CHC’s current debt, debt service, and payments?

Do the Executive Director and Chief Financial Officer “manage” the centers’ reported income and liabilities on the financial statements?

Next post: The Unlearned Lessons of Failing Community Health Centers –
Part 3 - Financial Statements as Fairytales – Financial Statements that have a somewhat flexible relationship with reality.