The Healthcare Financial Management Association has released the results of a new survey as part of their Healthcare Financial Pulse project. The full healthcare survey discusses the strategies being used by healthcare entities to combat that challenges they are facing as a result of the recession, and note:

The majority of financial executives who responded to the HFMA survey said their organizations experienced negative fallouts from the recession in the second half of 2008, including declines in nonoperating revenue, patient revenue, and days cash on hand. Large hospital respondents had the largest dips in investment portfolios, while rural hospitals took the biggest hit on patient revenue.

If you'd like to learn more about identifying and implementing recession fighting strategies for the healthcare industry, please contact REDW's industry experts or .

The National Association of Community Health Centers released an issue brief this month to address the Federal Trade Commission (FTC) regulations (the Red Flags Rule) requiring financial institutions and creditors to develop and implement a
written Identity Theft Prevention Program, as required by the Fair and Accurate Credit Transactions (FACT) Act of 2003. This brief has some important information that should be read by those in the healthcare industry. For example, consider this:

Requiring payment in full at the time of service (including full payment of insurance copays or discounted fees under a “sliding fee” scale) either in cash, with a credit card, or via a third party, such as Medicaid, Medicare or other third party payor, does not constitute the extending of credit. On the other hand, allowing patients to pay on a periodic basis –to defer full payments (with or without the imposition of any interest on carrying charges) –would be extending credit under the regulation and would be subject to the Red Flag Rule requirements if the health center regularly follows this practice. Deferment includes situations under which a patient is billed after the service is rendered.

The brief includes guidance on the steps that should be taken to draft an Identity Theft Prevention Program. If you'd like to learn more, please contact REDW's healthcare service experts or to discuss how best to identify, mitigate, and respond to threats of patient identity theft, thereby satisfying the Red Flags Rule requirements.

Diversification using asset allocation is an important tenant of REDW Stanley’s investment process. We use modern portfolio theory to construct the best portfolio for each client’s goals and objectives and risk tolerance. We use a number of different asset classes to achieve diversification. Allowing asset allocation to work over a market cycle is one key to successful investing.

To illustrate this point, see the difference asset allocation can make for an investor who began with an investment of $10,000 and maintained their asset allocation over the time period from December 31, 1983 to December 31, 2008:



Chart Source: Ned Davis Research, 12/31/08. These charts are for illustrative purposes only and do not predict or depict the performance of any investment.

Thinking long term during a difficult market cycle is contrary to human nature, but this challenging market cycle will pass. Time and opportunity are basic precepts of asset allocation. Fear and greed are powerful human emotions. Our role is to help you navigate through these challenging times and to act rationally and logically. Turn off the TV and look forward. Reevaluate your risk tolerance and, if necessary, your asset allocation. Try to think in terms of years. It is hard to do, but positioning your portfolio correctly now can contribute to achieving your future goals and objectives.

To learn more about positioning your portfolio to achieve your future goals, please contact REDW Stanley Financial Advisors today at 505.998.3200.

This information is brought to you by REDW Stanley Financial Advisors LLC, an SEC registered subsidiary of REDW The Rogoff Firm.

The Kaiser Family Foundation has invested in several studies, which examine health coverage and the uninsured. Last month the foundation released an interesting issue paper entitled, Community Health Centers in an Era of Health System Reform and Economic Downturn: Prospects and Challenges. The study finds the number of community health centers has grown significantly in recent years, and notes some of the revenue challenges faced by these facilities:

In 2007, the proportion of patients with private health insurance stood at 16 percent of all health center patients; however, payments from private health insurance represented only 6 percent of health center operating revenues. This discrepancy in revenues may reflect numerous factors, including more limited coverage, higher cost-sharing, and lower payments that lack the special features of the FQHC payment system. These key differences have had a considerable financial impact on health centers; the estimated cumulative losses experienced by health centers over the 1997-2007 time period as a result of the revenue gap between private insurance and health center costs surpasses $5 billion. If compensated for these losses, health centers would be able to provide comprehensive primary care services to an additional one million uninsured patients.

To explore possible solutions to address some of the challenges faced by community health centers, please contact REDW's healthcare service experts or .

The radically and rapidly changing economic landscape continues to have significant repercussions when it comes to company audits. A recent article on CFO.com notes that there has been an increase in going-concern opinions issued by audit firms with more than 23 percent of filings of public-company filings made for fiscal year-ends from June 30, 2008, to December 31, 2008 included a going-concern opinion. Going-concern opinions are somewhat subjective views on behalf of the auditor that require them to act as a forecaster regarding a businesses future viability.

What's more, the prediction portion of their jobs is getting harder. That's because the current downturn has poked holes in previously settled auditing assumptions and the capital structures of previously well-financed companies. "We all feel like we have to reprogram our crystal balls today because things are much different than they have been in the past," said Steven Rafferty, professional practices partner at audit firm BKD LLP, during a recent meeting of the Public Company Accounting Oversight Board's advisory group.

In the current economic environment, Rafferty lamented, auditors' evaluations of a company's ability to continue as a going concern — an already "extremely subjective" task — have become evermore difficult. Further, auditors will likely have to expand their current forecasts as the PCAOB works to align its existing standard with a new rule by the Financial Accounting Standards Board requiring companies to assess their going-concern status beyond a 12-month time frame.

Now more than ever, your business needs accounting and audit service providers with the resources to stay on top of the ever-evolving regulation standards, to learn more please contact - REDW's audit expert.