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KPMG engagement credited with stabilizing Nashville General finances; leaders outline cuts, staffing changes and growth plan
Summary
KPMG presented a 90‑day engagement that hospital leaders say improved invoicing, revenue recognition and monthly reconciliations. Hospital executives reported cuts to leadership and management roles and said the organization reversed a deep negative balance, drove down payables and positioned the hospital for an efficient audit.
NASHVILLE — Hospital leaders and KPMG consultants told the Hospital Authority board that a recent 90‑day consulting engagement produced rapid improvements in accounting processes, vendor accruals and financial reporting, and that those changes — together with organizational restructuring — have reduced near‑term risk and improved monthly results.
KPMG partners Hillary Simic and Chris Dixon summarized the firm’s engagement, saying consultants identified roughly 90 process improvements across invoicing, revenue recognition, reconciliations and payroll controls. “Over the course of the last 3 months, Nashville General Hospital embraced process improvements … [and] is well positioned for a timely and efficient audit,” Dixon said.
Hospital leaders credited the KPMG work with measurable improvements in payables and accounts processes. KPMG reported outstanding payables of about $27 million when the interim leadership team began in February; the firm said payables were down to about $13 million by the time of the presentation. Hospital finance staff reported accounts‑payable figures and month‑end results that reflect improved control and a more standardized month‑end close process.
Interim CEO Dr. M. Elders and Dr. Blackledge outlined personnel and operational changes. Elders said the hospital reduced its chief executive positions from 16 to 6 and cut middle‑management roles from 117 to 67 as part of cost‑reduction and leadership‑streamlining efforts. The leaders reported several one‑time and recurring expense reductions: a $7.2 million reduction in contract labor, $1.78 million in contract services reductions, $4.5 million from salary‑expense changes and a $1.5 million annual saving from closing one underperforming Midtown location. Elders said annualized savings total roughly $14.752 million.
Finance staff also highlighted revenue and budget items. The board packet showed a one‑month net income of about $7.0 million driven partly by unbudgeted state funding of about $11.0 million that will be used to pay down accounts payable. The hospital’s reported fiscal‑year‑to‑date net patient revenue remained under budget for the period, a shortfall leaders tied in part to adopting a new methodology for valuing accounts receivable and revenue recognition recommended by KPMG.
Board members asked about sustaining improvements and next steps. Blackledge said the hospital has hired new staff in the finance department, adopted standardized reconciliations and implemented vendor‑specific accrual processes. KPMG said new processes reduced a backlog of vendor invoices and improved timeliness of payments.
Leaders also described operational priorities for growth: increasing clinic visits, inpatient and emergency volumes, surgical cases and cardiology services. A search for a permanent CEO is underway; a board committee is overseeing a public procurement for an executive search firm and expects to recommend a vendor to the board for approval.
Ending: KPMG and hospital leaders said improvements have reduced near‑term financial risks and prepared the hospital for an audit; board members affirmed the need to maintain momentum on process controls and to follow through on growth initiatives.
