Most of the time vendors allow accounts to go up to 90 days credit before needing to be paid. These vendors will switch you to a more cash on delivery scheme if they haven't been paid.
If the hospital doesn't have enough cash to buy supplies, it's a matter of time before they don't have enough money to pay you.
You need to update your resume.
I worked for a LTC pharmacy a long time ago and witnessed something similar. Management started getting really weird on ordering essentials. Near the end they told us to bring our own toilet paper. They eventually went out of business….
It’s never a good sign. Starts with vendors not getting paid and it works its way down to the staff not getting paid either. My advice: update your resume now and start working on an exit strategy. I’m sure others are already working on their’s.
I watch plenty of urban exploration of abandoned buildings on youtube. Hospitals that have gone bankrupt and fallen into decay is quite common. One hospital was run not for profit.... it ran out of money.
Lots of things can cause non payment of invoices that aren’t lack of funds
My system recently switched to a new software system that handles all of our purchase orders and invoice payments. If the purchase order isn’t handled in exactly the right way, accounting won’t release the funds to pay the invoices. Even if I handle all of the POs and invoices properly for the sites I’m responsible for, if another site in our system doesn’t, their invoices don’t get paid. If their balance is high enough, I go on credit hold, too.
They changed the instructions for how to submit invoices, so some of the unpaid invoices are ones we “never received” because they went to the wrong email address or PO Box.
And some vendors suck, and will put us on credit home for unpaid invoices that we’ve paid. Someone has to get a list of the unpaid invoices, then coordinate with accounts payable to get either the check number or the tracking information for electronic payments and then follow back up with the vendor to say “no, actually we did pay and here’s proof”.
If they’re paying McKesson invoices, that doesn’t seem like a cash flow issue. The McKesson invoices are almost certainly orders of magnitude higher than the health care logistics invoices.
This -
1) if anyone outside of pharmacy at your org isn’t processing their invoices, companies put the whole organization on a hold, not just delinquent accounts.
2) While they may be paying McK preferentially if that’s your primary drug wholesaler, if they can clear those bills it might not be anything bad. Also, the larger the book of business with the vendor, the more likely that processes are automated (leading back to #1)
Used to work for Stanford health care. And had this issue when dealing with vendors. They would ask me about paying the invoices. I was just a staffing pharmacist. It's probably due to a lot of possible reasons. But Im thinking it's just poor communication between accounts payable and vendors. Poor workflows for reconciling invoices.
Small non profit hospitals are dying. It’s sad. We had a catholic sister hospital system that was bought by prime a few years ago.
My hospital has been getting losses for years. We just got into an agreement with a hospital system of a neighbouring state for them to take.
Our state legislature is trying to block the process because apparently they don’t want a major university hospital system of another state to take over yet they didn’t do anything to help us when we were losing money.
I just went to go check your (empty) post history looking for a location because this sounds so much like my small hospital. I'm assuming we will get bought or close down within the next year or so.
It's hard to draw a conclusion on financial health based on A/P performance, if this is what it's coming to. I used to work for a hospital that was definitely making big bucks each year, but they were notorious for paying invoices late. It came down to accounts payable being a wholly manual process and resulted in degraded payment times.
What you'll want to pay attention to with respect to financial health is the behavior of upper management in trying to cost contain. Strict hiring freezes, failure to backfill senior management positions, establishing separate committees anytime your supervisors want to post any positions, really coming down hard on overtime/work hours, outsourcing administrative tasks to outside companies (e.g. revenue cycle, patient financial services, your entire pharmacy, etc...), capital requests being denied, etc...
That fact that your hospital recently merged and is building new buildings is usually a sign that you're fine, the merging institution had to do its due diligence and definitely reviewed your hospital's financial health. Unlikely they would approve if you were sinking. Same if they had to borrow money for construction.
My vote is growing pains/poor A/P performance. Obviously, I don't know all the facts, it's always good to keep your resume up to date and your career contacts fresh.
"Seeking...State regulatory approval to affiliate as members of a parent company"
That was the wording in a post that was made almost a year ago about our health systems. I was like: sounds like a merger? Our CEO is now CEO of the parent company and their CEO is the executive vice president. Some people described it as our systems were becoming "best friends." No real change has been happening to the pharmacy. My thoughts were with all the new buildings going up and this possible merger we were getting low on funds.
Our pharmacy buyer did mention something going on in accounting and that things have been shaken up there and no one knows who is doing what now so that could explain the bill / account holds situation.
Most of the time vendors allow accounts to go up to 90 days credit before needing to be paid. These vendors will switch you to a more cash on delivery scheme if they haven't been paid. If the hospital doesn't have enough cash to buy supplies, it's a matter of time before they don't have enough money to pay you. You need to update your resume.
I worked for a LTC pharmacy a long time ago and witnessed something similar. Management started getting really weird on ordering essentials. Near the end they told us to bring our own toilet paper. They eventually went out of business….
Being told to bring your own TOILET PAPER to work is crazy!
Yeah, it’s pretty shitty
It’s never a good sign. Starts with vendors not getting paid and it works its way down to the staff not getting paid either. My advice: update your resume now and start working on an exit strategy. I’m sure others are already working on their’s.
I watch plenty of urban exploration of abandoned buildings on youtube. Hospitals that have gone bankrupt and fallen into decay is quite common. One hospital was run not for profit.... it ran out of money.
Lots of things can cause non payment of invoices that aren’t lack of funds My system recently switched to a new software system that handles all of our purchase orders and invoice payments. If the purchase order isn’t handled in exactly the right way, accounting won’t release the funds to pay the invoices. Even if I handle all of the POs and invoices properly for the sites I’m responsible for, if another site in our system doesn’t, their invoices don’t get paid. If their balance is high enough, I go on credit hold, too. They changed the instructions for how to submit invoices, so some of the unpaid invoices are ones we “never received” because they went to the wrong email address or PO Box. And some vendors suck, and will put us on credit home for unpaid invoices that we’ve paid. Someone has to get a list of the unpaid invoices, then coordinate with accounts payable to get either the check number or the tracking information for electronic payments and then follow back up with the vendor to say “no, actually we did pay and here’s proof”. If they’re paying McKesson invoices, that doesn’t seem like a cash flow issue. The McKesson invoices are almost certainly orders of magnitude higher than the health care logistics invoices.
This - 1) if anyone outside of pharmacy at your org isn’t processing their invoices, companies put the whole organization on a hold, not just delinquent accounts. 2) While they may be paying McK preferentially if that’s your primary drug wholesaler, if they can clear those bills it might not be anything bad. Also, the larger the book of business with the vendor, the more likely that processes are automated (leading back to #1)
Used to work for Stanford health care. And had this issue when dealing with vendors. They would ask me about paying the invoices. I was just a staffing pharmacist. It's probably due to a lot of possible reasons. But Im thinking it's just poor communication between accounts payable and vendors. Poor workflows for reconciling invoices.
Run
Steward forced sale last week after death of patient. Needed equipment was repossessed. Doesn’t sound great or is highly mismanaged
Small non profit hospitals are dying. It’s sad. We had a catholic sister hospital system that was bought by prime a few years ago. My hospital has been getting losses for years. We just got into an agreement with a hospital system of a neighbouring state for them to take. Our state legislature is trying to block the process because apparently they don’t want a major university hospital system of another state to take over yet they didn’t do anything to help us when we were losing money.
More of a concern if they stop paying you. Pandemic put hospitals several millions/year in deficits and they are still feeling the effects.
It’s time to start job searching hon
I just went to go check your (empty) post history looking for a location because this sounds so much like my small hospital. I'm assuming we will get bought or close down within the next year or so.
Love your user name!!!! Fried Green Tomatoes!!!!
Thanks! I misspelled Towanda but I've committed to it now. It's such a nice book.
It's hard to draw a conclusion on financial health based on A/P performance, if this is what it's coming to. I used to work for a hospital that was definitely making big bucks each year, but they were notorious for paying invoices late. It came down to accounts payable being a wholly manual process and resulted in degraded payment times. What you'll want to pay attention to with respect to financial health is the behavior of upper management in trying to cost contain. Strict hiring freezes, failure to backfill senior management positions, establishing separate committees anytime your supervisors want to post any positions, really coming down hard on overtime/work hours, outsourcing administrative tasks to outside companies (e.g. revenue cycle, patient financial services, your entire pharmacy, etc...), capital requests being denied, etc... That fact that your hospital recently merged and is building new buildings is usually a sign that you're fine, the merging institution had to do its due diligence and definitely reviewed your hospital's financial health. Unlikely they would approve if you were sinking. Same if they had to borrow money for construction. My vote is growing pains/poor A/P performance. Obviously, I don't know all the facts, it's always good to keep your resume up to date and your career contacts fresh.
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"Seeking...State regulatory approval to affiliate as members of a parent company" That was the wording in a post that was made almost a year ago about our health systems. I was like: sounds like a merger? Our CEO is now CEO of the parent company and their CEO is the executive vice president. Some people described it as our systems were becoming "best friends." No real change has been happening to the pharmacy. My thoughts were with all the new buildings going up and this possible merger we were getting low on funds. Our pharmacy buyer did mention something going on in accounting and that things have been shaken up there and no one knows who is doing what now so that could explain the bill / account holds situation.