Imagine facing the board of directors' finance committee with the ugly little discovery that your hospital's budget is more than a million dollars out of whack.
You've recently been hired as chief financial officer, and it's your job to straighten out the mess.
Oh, and one other thing. You're in the middle of building a new $8 million, 153-bed nursing home. If you can't turn things around, the hospital's BBB+ bond rating could plummet, sending financing costs skyward.
A bad dream, you say? For Ann Rice, it was reality, and she dealt with it.
Shortly after becoming vice president for fiscal services at 122-bed Central Vermont Medical Center, a community hospital in Barre, Vt., Ms. Rice approached her chief executive officer with the $1.5 million budget gap. The budget she inherited upon joining the hospital in August 1992 was built on the assumption that volume and revenues would increase. They didn't.
"It meant that we had to go in at the middle of the year and raise our rates," she said.
In addition to securing the board's approval, Ms. Rice needed to get an OK from the Vermont Hospital Data Council. "We ended up with about an 8% midyear increase," she said.
As the new kid on the block, Ms. Rice's gloomy assessment easily could have been questioned. She's thankful for the support she received from senior management and the board.
"I was too new to really have a track record with them," she said.
She even convinced Standard & Poor's Corp. to retain its BBB+ rating, enabling the hospital to close a $10 million tax-exempt financing, which provided funding for the new nursing home.
"It's a lot of fun to really see change happen and be able to affect that," Ms. Rice said.
Colleagues say she's bright and articulate, someone who could handle a CFO position in a big Boston or New York City hospital. But for now she's happy and challenged in Vermont.
Ms. Rice, 37, is a transplanted Midwesterner, raised and educated in Iowa. In 1979, with her bachelor of science degree in industrial administration from the University of Iowa, she landed a position as financial accountant with Massey-Ferguson, a Des Moines, Iowa-based industrial and farm machinery manufacturer.
In May 1980, the University of Iowa Hospitals and Clinics in Iowa City hired Ms. Rice as a financial analyst. She enjoyed working directly with department heads to help them understand and adhere to their budgets.
In 1983, after finishing her master's degree in accounting at the University of Iowa, she and her husband, Tom, a political science professor, headed east for his new teaching position at the University of Vermont.
Ms. Rice was hired as chief accountant for the newly formed Vermont Health Foundation, the holding company for the Medical Center of Vermont in Burlington. Her accomplishments included setting up financial reporting systems that enabled fund-raisers to create endowments and provide feedback to donors.
Near the end of 1984, Ms. Rice established an internal audit function. It enabled the hospital and its affiliated corporations to identify efficiencies, streamline systems and monitor results of each operating department.
Several years earlier, a co-worker at the University of Iowa Hospitals and Clinics introduced Ms. Rice to the Association of Healthcare Internal Auditors, now based in Washington. In 1987, she became a board member and in 1988 she was elected president of the 1,000-member group.
Ms. Rice was promoted in January 1989 to director of accounting and controller of the 475-bed Medical Center Hospital of Vermont and its for-profit subsidiaries. With it came many new challenges, such as streamlining the finance staff to reduce overhead.
From 1989 to 1991, she served on the board of the Healthcare Financial Management Association's New Hampshire/Vermont chapter.
In 1992, she snagged the CFO opening at Central Vermont, about 40 miles from Medical Center Hospital. Recently, she's been working with physicians in the hospital's physician-hospital organization on signing managed-care contracts. She's also watching the hospital's balance sheet.
Faced with declining operating margins, "we need to be more careful about how we use the resources that we do have," she said. In today's environment, "hospitals need good financial managers more than they ever have," she added.
Ms. Rice may be a CFO for the '90s, but she's equally enthusiastic about her role as wife and mother. Her daughters, Katherine, 6, and Charlotte, 4, have helped her see the healthcare system in a whole new light. "As a mother, I'm really interested in how the system works for people," she said.