As discussed in my first blog post, this summer I have had the immense privilege of working at Angkor Hospital for Children in Siem Reap, Cambodia. My first post was about the clinical impact of two major disease outbreaks in the region during my summer there. The hospital was forced to function massively over capacity, which is particularly impressive considering it sees over 130,000 patient in a normal year. While I was there the overflow of Dengue Fever cases forced us to set up beds in our hallways and turn classrooms into temporary wards.
AHC is a non-profit hospital. Its operating costs are entirely supported by donations. The healthcare and services that it provides are entirely free to patients. This is true even during these disease outbreaks when the hospital is spending significantly more money than projected due to the unpredictable nature of these events. So while the whole clinical front end of the facility morphed to deal with this outbreak, there was a massive movement to make sure that our accounting and development departments also correspondingly ramped up to keep our cash flows in line with our increased spending.
One of the main problems with an epidemic is that it is unpredictable, we can never be sure how many patient will come in each day. This makes financial forecasting quite difficult, and in many cases hospitals in developing countries will be re-active in their fundraising (we spent X last month, and hence we need to raise that money now to keep running). This can make working for these NGO hospitals quite never racking, as employees are never 100% sure that the facility will have money for their paychecks. This was one of the situations where I was able to help AHC a lot. In my previous work I have done a lot of computer simulation modeling, and the GSB greatly expanded my array of modeling tools. Over the summer I was able to take the vast data from the financial departments and with some clinical probabilistic modeling was able to calculate a series of expected costs to our Dengue Treatments at AHC.
From that data we were then able to shift our fundraising into a proactive phase, where we were recruiting donors with the knowledge of how much we would need to raise to stay cash flow positive in our worst case scenarios for patient volumes. This gave the whole facility a sense of ease when we started hitting our expected funding goals, particularly as the first few weeks passed and we saw how our projections matched the actual patient volumes that came through our doors. After this initial success, the accounting department and management teams decided that this kind of predictive forecasting should be turned into a routine practice at the hospital. Being able to assist the hospital in a way that changed the routine management of the facility was an incredible reinforcement to the utility of my MBA, and made the entire summer feel like a great success.
Nico Grundmann - 2012 SMIF Intern with the Center for Social Innovation, Stanford GSB