How to Guarantee a Guarantee

How to Guarantee a Guarantee

These are challenging times, full of doubt and self-doubt for executives of hospitals with net patient revenues under $100 million.

Promises of guaranteed ROIs or guaranteed new net cash are often met, at best, with disbelief. Faced with these not-to-be believed guarantees, what steps should a concerned hospital CEO or CFO take to properly, practically and constructively consider these guarantees, beyond just doubt?

When hospital consultants offer guarantees, they are often met with understandable skepticism, if not outright rejection and derision. This skepticism deepens when the guarantee involves a specific dollar amount or a formula for increased cash flow. Hospital executives may think, “That’s too good to believe,” and dismiss the consultant and guarantee offer entirely.

So, what can a guarantee-offering consultant and a doubting executive do to overcome this executive skepticism barrier and make this cash flow guarantee offer credible, sellable and buyable?

For example, a consulting firm might contractually guarantee a prospective hospital client a net cash increase greater than 5% of the hospital’s net patient revenues. While this may appeal to a receptive CEO or CFO, it can have the opposite effect on those who are skeptical. No executive wants to pay for a contract attorney to scrutinize every micro-fonted detail of a complex, legalistic document. They simply want increased cash flow, not a retro-rerun of LA LAW.

These guarantees must be usably credible, clearly comprehendible and practical for hospital executives. It’s essential to incorporate clear, practical, dynamic concepts and their definitions to ensure that these ten key components are effectively and operationally integrated into the engagement contract and in the engagement itself. Without these integrated ten guarantee elements, there is no effective and trustworthy guarantee for a valid, target-consistent increased cash flow.

How To Guarantee?

These ten necessary guarantee components are especially relevant for rural and small hospitals. For these hospitals so much more is in here-and-now jeopardy. These smaller, independent hospitals are often at immediate and intermediate risk of: layoffs, service reductions and eliminations, inadequate days cash on hand, bond grade/rating reductions, bankruptcy and most simply and catastrophically, closure:

  1. Patented: The service is unique, as defined by the US Patent and Trademark Office and based on a USPTO-approved process. However, the patent itself doesn't guarantee any specific cash flow amounts or timeframes or guarantee anything beyond the patent itself.\
  2. Zero-Risk: The hospital endures zero-risk from this contingent cash flow service. The hospital incurs no up-front or out-of-pocket expenses, layoffs or service reductions/closures. The consultancy bears 100% of the risk, only getting paid from actual new/net results. Without this guaranteed component for the rural/small hospital, it’s a very risky business and ill-affordable for hospitals under $100MM in net patient revenues.
  3. Affordability and Profitability: Please see guarantee components #2, #7, #9 and #10. These components are critical success factors necessary for achieving engagement affordability….and more importantly, hospital engagement profitability for the hospital.
  4. Guaranteed: The consultancy provides a specific dollar amount or formula for the engagement’s results within a defined timeframe…literally and contractually guaranteed by the consultancy for the hospital.
  5. Contracted and Legally Supported: The engagement contract includes all ten guarantee terms in clear, enforceable, meaningful, effective detail, protected by federal and state law in the hospital’s home state, so that the hospital is fully protected, assured and comfortable.
  6. Proven-in-Practice: All engagement solutions/tactics are proven-in-practice by the consultancy’s extensive, relevant, successful, repeated experiences.
  7. 90% of the Implementation Work: Most rural and small hospitals have very limited or no resources to devote to a consulting engagement. Therefore, the consultancy handles 90% of the work, minimizing the hospital’s resource burden, upfront costs and added risks.
  8. Control: The hospital controls which solutions/tactics are chosen and how, when, and how quickly they are implemented and customized, with full consultancy support.
  9. Solution Selection: The engaged hospital must have a large range of maximally customizable, enterprise-wide solutions/tactics to choose from, from the consultancy.  These solutions/tactics must align with the hospital’s administrative culture for quick and easy implementation by rural and small hospitals for rapid cash flow growth.
  10. Unique Knowledge, Experience, and Speed: The consultancy can uniquely facilitate solution/tactic implementation more quickly, easily, and lucratively, guaranteeing sooner, bigger cash outcomes for the contracting hospital.

Incorporating these ten essential guarantee elements into the engagement ensures the guarantee is in fact guaranteed. That guarantees that the engagement is effective, trustworthy, and credible. This is particularly necessary for rural and small hospitals facing immediate and intermediate risks such as layoffs, service reductions, and even closure, where guaranteed quick cash can be a survival issue.

For more information, please contact:

Rick Kunnes, MD - rkunnes(at)

Managing Principal

Margin Solutions