From the Chair
Gregory Adams, FHFMA
When I was growing up, it didn't cost my parents anything for me to play basketball beyond the cost of the ball itself.
We had no uniforms, paid no club participation fees, and incurred no travel costs. There were no travel teams or paid lessons back then. I played at the neighborhood basketball courts. I loved basketball from the start and learned many lessons from the game. Although I never played professionally, it became my lifelong athletic passion. So the return on that small initial investment in the ball was pretty high.
Today, youth sports is a multibillion-dollar industry. Many parents spend hundreds or thousands of dollars each year for entry fees, equipment, hotel rooms, transportation, professional training, and other expenses so their children can participate in club or advanced level sports-sometimes without giving much thought to the value received. In these tough economic times, the following simple guidelines for managing the cost of youth sports could also serve as guidance for healthcare finance professionals in search of ways to reduce costs in their organizations. (As I have written about previously, sports is a great source of life lessons.)
Be honest with yourself. Before parents invest in club or travel sports, they should consider whether their child has demonstrated exceptional ability in a sport-or, more important, has a passion for it-that would justify the expense. Too often, parents push children into youth sports without thinking about the cost-value relationship. Healthcare finance leaders might ask a similar question about their departments' core competencies. CFOs can often find revenue and cost savings "in their own back yard," authors Jan van Londen and Paul Zimmerman point out in this issue of hfm. By giving up long-held ideas about business processes and practices, and applying the same analysis to the finance department that they use in other parts of the organization, the authors write, progressive financial leaders can save money and even generate revenue.
Seek balance. In the world of youth sports, road trips and practice schedules often cut into family or homework time. If a child's sports commitments are compromising other important activities to the child's detriment, the parents may be going overboard. Likewise, if your organization's investment in one area of the enterprise leaves other areas starved for resources, it's time to rethink your resource allocation strategy.
Sell what you don't need anymore. In youth sports, that means selling the old sports equipment a child has outgrown to help pay for new equipment. In health care, it can mean monetizing nonstrategic assets, as I mentioned in my Virtual Conference presentation in December. (You may view presentations on demand and register for the April 11 Live Event by visiting www.hfma.org/virtualconference.) Selling or otherwise divesting resources tied up in underperforming assets or business lines can unlock capital for new investments.
Although it's not always easy to let go of items that once held value, a good spring cleaning may be what's needed. There are always exceptions, of course-like my old basketball and a few other sports memorabilia items. That's what basements are for.
Publication Date: Thursday, March 01, 2012