WINTER 2010
CONTENT Message from the President 4 J. Eric Evans
Going Green without Sacrificing Quality 5 Stephanne Hale, RN
Update Your Member Info Today!
Award of Chapter Merit and Beyond
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ACHE’s Congress on Healthcare Leadership
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Consumer Confidence in Healthcare
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Warning Signs of a Distressed Hospital
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Bob Vento
Calendar
Have you moved, been promoted, changed jobs or had any other changes to your member profile? If so, we encourage you to take a moment to update your record via the ACHE website. As a chartered chapter from ACHE, we receive credit for each member that is registered in our market area. This credit plays a substantial part in bringing you quality educational and advancement opportunities throughout the year. Plus, it is a great way to ensure those important networking contacts can reach you! To update your member contact information, go to www.ache.org and click on MyACHE then select My Profile then Address Update then click on Change Your Address Information.
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The ACHE of North Texas e-magazine, The Executive Connection, is published quarterly (Spring, Summer, Fall and Winter) and includes information on the latest regulatory and legislative developments, as well as the quality improvement and leadership trends that are shaping and influencing the hospital and health system field. Readers get indepth reporting on the issues and challenges facing hospital and health system leaders today. We make it our job to tell you about the great things the organization and Chapter are doing every day to ensure the health of our community. If you have any news and updates that you want to share with other members, please e-mail your items to info@northtexas.ache.org. Microsoft Word or compatible format is preferable. If you have a graphic or picture that you’d like to include, please send it as a separate file. The following are the types of information that our members shared in our past ACHE of North Texas magazine: Advocacy Issues, Legislative Issues, Educational Opportunities, Awards / Achievements, Promotions (Members On the Move), Committee Updates, Journal submissions, conference submissions, and workshop participations, sharing mentoring experiences, etc.
ACHE of
North Texas
A Publication of the American College of Healthcare Executives of North Texas Chapter | WINTER 2010
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2010 Board of Directors Britt Berrett, PhD, FACHE Texas Health Presbyterian Hospital of Dallas Ex-Officio Ron Coulter, MHSM, FACHE Texas Health Methodist Hospital—Cleburne Co-Chair, Mentorship Committee
Editor-In-Chief
Susan Edwards
Managing Directors
Joan Clark, MSN, RN, FACHE Angela CJVincent
Rhonda Countryman Coordinator, ACHE of North Texas Chapter
Contributing Editors
J. Eric Evans Scott Schmidly, FACHE Jania Villarroel, MHA
Beverly Dawson, RN, CCM Elder Care LP Co-Chair, Education Committee
Production
Kay Daniel
Advertising/ Subscriptions
info@northtexas.ache.org
Questions and Comments:
ACHE of North Texas Editorial Office, c/o Executive Connection 3001 Skyway Circle, Suite 100, Irving, Texas 75038 p: 972.256.2291 f: 972.570.8037 e: info@northtexas.ache.org w: northtexas.ache.org
2010 Chapter Officers
President J. Eric Evans Tenet Healthcare Corporation
President-Elect Brad Simmons, FACHE Parkland Health & Hospital Systems Co-Chair, Membership Committee
Past President Janet Henderson, MHA, FACHE Parkland Health & Hospital System Chair, Nominating Committee Co-Chair, Education Committee
Secretary Scott Schmidly, FACHE Medical City Dallas and Medical City Children’s Hospital Co-Chair, Communication Committee
Treasurer Gail Maxwell, FACHE Baylor University Medical Center
Forney Fleming University of Texas at Dallas Ex-Officio Jonni Johnson, CPSM RTKL Associates Inc. Chair, Sponsorship Committee Elizabeth McGrady, FACHE University of Dallas Michael J. Ojeda, MHA, FACHE VA North Texas Health Care System Co-Chair, Advancement Committee Caleb F. O’Rear, FACHE Denton Regional Medical Center Co-Chair, Mentorship Committee George L. Pearson, JD, FACHE Texas Health Resources Rick Stevens JPS Heath Network Co-Chair, Membership Committee Matt Van Leeuwe Parkland Health & Hospital System Student Council Jania Villarroel, MHA Metropolitan Anesthesia Consultants, LLP Co-Chair, Communications Committee Demetria Wilhite The University of Texas at Arlington Ex-Officio Co-Chair, Advancement Committee Bethany Williams PricewaterhouseCoopers, LLC Chair, Networking Committee
A Publication of the American College of Healthcare Executives of North Texas Chapter | WINTER 2010
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Message from the President Dear Members, Happy New Year. I want to start by thanking you for the opportunity to serve as President of the ACHE of North Texas chapter in 2010. I would also like to recognize the leadership provided by Dr. Britt Berrett and Janet Henderson who served as your Regent and President in 2009 as well as John Self and Sandy Lutz who completed their board service last year. Additionally, I would like to congratulate John Haupert on his election as Regent for North Texas and the the rest of our 2010 Board of Directors and Officers on their continued service. Finally, I would like to express my sincere appreciation to our 2010 corporate sponsors including Medical City Dallas Hospital as a platinum sponsor and the Baylor Health Care System, RTKL, and Tenet Healthcare as gold sponsors. Without the generous support of these organizations, we would be unable to provide the numerous programs and services that further the development of our profession. 2010 promises to be another year of rapid change and continued uncertainty in the healthcare industry. As industry leaders, more will be expected of us in our efforts to improve the quality, service, and value we provide to our patients, patient families, physicians, and co-workers. These increasing expectations make it more important than ever to remain actively engaged in professional societies like ACHE which offer educational programs providing the latest information on key trends in the healthcare industry as well as development and networking opportunities to aid career advancement and to enhance professional performance. Please take a moment to review our chapter’s 2010 calendar of events and make plans to join us. As you will see, we are again offering numerous Category I education sessions featuring regional and national leaders in healthcare. In addition, we are offering significantly more networking and advancement opportunities as well as targeted events for senior leaders and early careerists. Whether you are a new or current member please take the time to explore the services offered by your local chapter (http://northtexas.ache.org) and ACHE national (www.ache.com). We welcome volunteers and encourage feedback to help us better meet your professional development needs. Please feel free to contact us at acheofnorthtexas@gmail. com. I look forward to seeing you at one of our upcoming chapter events. J. Eric Evans 2010 Chapter President
ACHE of
North Texas
A Publication of the American College of Healthcare Executives of North Texas Chapter | WINTER 2010
Going Green without Sacrificing Quality By Stephanne Hale, R.N.
Environmentally sustainable products and methods help the environment, often while improving quality and the bottom line.
Hospitals are joining the effort to make our planet healthy. While in the past eco-friendly hospitals were few and far between, new products and methods are allowing today’s health care facilities to become more sustainable and adopt strategies to go green. Quality and environmentally preferable practices aren’t mutually exclusive. Hospitals can go green without sacrificing quality. In fact, many green efforts may provide added benefits. The Basics of Going Green Hospitals are adopting a variety of easy methods to become more sustainable. VHA Inc., the national health care alliance, conducted a survey of hospital executives at its 2008 leadership conference in May and learned that nearly 60 percent have implemented environmental or sustainable initiatives. The most popular initiatives are: recycling (94.9 percent); using energy-efficient products (71.8 percent); and reducing or reusing applicable resources and materials (64.1 percent).
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In addition, 80 percent of those surveyed said they would switch from a current supplier to one that offered a wider selection of sustainable products. Easy on the Bottom Line Financial concerns are a major reason some hospitals are wary of going green. But becoming more environmentally friendly can be just as friendly on the bottom line. Boulder (Colo.) Community Hospital reports a cost avoidance of $600,000 per year from its greening initiatives. Even building new green facilities can be reasonably priced. The true incremental costs for green building in health care are approximately 1 percent—a small fiscal impact in comparison with the environmental benefits. Reduce, Reuse, Recycle Recycling—the most common environmental practice of hospitals—is an easy way for hospitals to preserve the environment without any detriment to patient care. Through its recycling program, Boulder Community Hospital has saved 4,524,300 gallons of water, 2,848,400 kilowatt hours of electricity and 11,000 trees, while eliminating 39,100 pounds of pollutants and 5,000 yards of landfill materials since 1996. The Oregon Health and Science University also boasts a successful recycling program that diverts 26 percent of all waste from landfill. The program has had a dramatic effect on the environment without compromising the hospital’s practices. Another way to go green without sacrificing hospital quality is by employing reusable products whenever possible. Rancho Los Amigos National Rehabilitation Center in Downey, Calif., is considering recycling noninvasive patient care items like sequential compression device sleeves and oximeter probes. Also, using real silverware and dishes in the hospital cafeteria is a great way to reduce paper and plastic. Facilities can use ecofriendly cleaners on these reusable products to minimize the effects of harmful chemicals on the environment. Conservation Conserving resources is a simple way to reduce a hospital’s impact on the environment. The University of Maryland Medical Center has four targets for conservation: energy, water, medical gas and supplies. Another one of its goals is to reduce paper use. Currently, it uses approximately continued on page 6
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High-Quality Green Purchasing Purchasing is another area where hospitals can go green. Many hospital purchasing departments are tasked with choosing environmental products that are as effective as their less-green alternatives. Group purchasing organizations can be a great resource in making this transition. One helpful way to make sure that environmentally preferable purchases are high quality is to look for thirdparty certification. Important certifications to look for are: Energy Star—for energy-efficient appliances; Green Seal—for chemicals; and Forest Stewardship Council—for recycled paper. Purchasing sustainable food products can be a healthy choice for patients and staff. When choosing green food products, select products approved by the Food and Drug Administration (FDA) or United States Department of Agriculture (USDA) to include the following label claims: Poultry and meat products: Raised without antibiotics or No antibiotics administered. Beef and lamb: Raised without added hormones or No hormones added. Products made from corn, soy, canola or their derivatives: No genetically engineered ingredients. Milk products: rBGH-free, rBST-free or similar statement. Products from beef cattle, dairy cattle and lamb: Grass-fed. By choosing products with third-party approval, hospitals can ensure that their purchases will be both highquality and environmentally sound. Learning from the Best One successful strategy for going green without losing quality is networking with other hospitals. Hospitals that have already taken steps to go green can provide tips on what worked—and what didn’t. Modeling techniques after sustainable hospitals is a great way to learn the most effective greening tactics and minimize the hospital’s learning curve. Joining a green health care organization is another way to learn the most successful ways to go green. Practice Greenhealth, formerly Hospitals for a Healthy Environment, is a standout resource. The organization provides tools, resources and networking opportunities to guide hospitals in both green building and operations.
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Consider the University of Washington Medical Center in Seattle. The medical center recently began a papershredding program in conjunction with Weyerhaeuser to limit paper waste. The hospital has also changed its decontamination methods by switching to a chemical that is less hazardous to the environment. These simple changes provide dramatic benefits to the environment without sacrificing quality. Conservation is another hallmark of the University of Washington Medical Center. It began purchasing 100 percent renewable energy from Seattle City Light in 2006. While it cost the hospital an extra $40,000 per year, the added cost was countered by its water reuse program. A water reuse system at the University of Washington’s Consolidated Laundry has saved 12 million gallons of water over the past two years, saving the hospital $140,000 on water and $79,000 on natural gas. Looking to a Greener Future The health care industry is getting greener by the minute. Taking the initiative to make your hospital more sustainable can be a cost-effective way to help the environment without compromising the quality of facilities or patient care. Whether you choose organic food options, use energy-efficient products or anything in between, going green doesn’t have to come at a cost to the hospital. Becoming sustainable can be easy and cost-effective—take the steps to make your hospital greener today. Stephanne Hale, R.N., M.B.A., M.H.A., is senior clinical manager for safety, contract and program services at Novation in Irving, Texas. Reprinted from H&HN Online, by permission, September 9, 2008, Copyright 2008, by Health Forum, Inc.
A Publication of the American College of Healthcare Executives of North Texas Chapter | WINTER 2010
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Award of Chapter Merit and Beyond The North Texas Chapter was recognized in 2009 for earning the prestigious ‘Award of Chapter Merit’ by National ACHE. The criteria for this award is to meet at least one of the challenging performance standards related to Education and Networking, Net Membership Growth, Member Satisfaction, and Advancement. Eric Evans, Chapter President stated; “While we are honored to be recognized for this achievement, we need to build upon this momentum as we pursue the next level, Award for Chapter Excellence as a key goal for the new year. The requirements to earn the include meeting at least three of the four performance standards below: • Education and Networking Program – Chapters must provide at least 7.79 hours of chapter event programming per chapter member. • Net Membership Growth – Chapters must achieve net membership growth of 13%. • Membership Satisfaction – Chapters must receive 7.69 or higher on a 10-point scale in chapter member satisfaction. • Advancement of Eligible Members – Chapters must advance a number greater than or equal to 10.5% of the members eligible to advance at the beginning of the year. “Although less than 2% of all chapters achieve the status and distinction of Award for Chapter Excellence, I am confident we have the support of our membership to reach this goal. As one of the largest and most active chapters in ACHE this recognition is a great opportunity to showcase our dedicated and talented membership.” added Mr. Evans.
Don’t Miss ACHE’s Congress on Healthcare Leadership Join us in Chicago March 22–25 for ACHE’s 2010 Congress on Healthcare Leadership, the premier educational event for healthcare executives and one of the year’s best opportunities to learn, connect with leaders and advance your career. Whether you are new to Congress or you have attended many times before, you will find it to be one of the best values for your educational dollar and a great way to make the most of your membership in ACHE. New to Congress this year is Congress Express, a convenient way to experience Congress at a reduced cost—Wednesday and Thursday only. Congress will be held at the Hyatt Regency Chicago. Register early so you can have first pick of more than 115 high-quality seminars, networking events and career development sessions, along with opportunities to meet and interact with leaders in the field. Get a jump start on Congress by attending a pre-Congress seminar or one of our Boot Camps. Watch for the complete Congress brochure, which was mailed in mid-November, or view it online at ache.org/Congress. This year you will see an enhanced digital version of the online brochure to assist you further in choosing from among the many offerings.
Congratulations Scholarship Award Winners! ACHE of North Texas congratulates the following members on receiving scholarships to attend the 2010 Congress on Healthcare Leadership: Charmaine Christiansen Laurah Jackson
Paula Zalucki, FACHE Catherine Campbell Robert Buck
Sandi McDermott Jason McPherson
A Publication of the American College of Healthcare Executives of North Texas Chapter | WINTER 2010
Consumer Confidence in Health Care Largely Consistent Over 2009
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• An overwhelming majority of Americans viewed health reform as key to reviving the economy. • More than four in five Americans (81.7%) believed it was important that President Obama include health reform in plans to address the economy.
November tracking shows continued concern over the future of health care coverage and affordability of care.
• People were anxious that they would not be able to pay for routine care.
Published: Dec 22, 2009 Princeton, N.J. Reproduced with permission of the Robert Wood Johnson Foundation, Princeton, N.J.
• More than two in five people (44.4%) reported being concerned about being able to afford routine care in the future.
In a year when debate over the nation’s health care system and need for reform sparked a political rollercoaster, Americans’ confidence in health care remained mostly consistent throughout 2009, according to the Robert Wood Johnson Foundation Health Care Consumer Confidence Index (RWJF Index). After a sharp rise in confidence in October, the RWJF Index fell in November from 104.4 to 96.9 points—returning to a confidence level closer to those seen throughout most of 2009. Since the RWJF Index began in April 2009, confidence has averaged 99.2 points. Over 2009, an average of one in four Americans each month (26.5%) worried that they would lose health care coverage and nearly half (48.3%) worried that they would not be able to afford future health care needs if they or a family member became seriously ill. “As the debate over health reform has ebbed and flowed, polls show spikes and dips in Americans’ overall confidence in their health care,” said Risa Lavizzo-Mourey, M.D., M.B.A., president and CEO of the Robert Wood Johnson Foundation. “Despite monthly fluctuation, over time people’s concern regarding their ability to access and pay for care has remained consistent. That suggests that Americans’ confidence in the future of their care is more affected by personal concerns than political rhetoric. People are struggling and the health care system they experience is broken and not meeting their needs. That’s obviously a worry for many Americans.” The RWJF Index is created from data collected by the Surveys of Consumers, with analysis provided by the University of Minnesota’s State Health Access Data Assistance Center (SHADAC). The survey evaluates consumer confidence along a spectrum of economic issues including American health care. Additionally, the compiled 2009 research finds that on average:
• People worried about not being able to afford future prescriptions. More than four in 10 Americans (41.1%) worried about being able to afford needed prescriptions in the future. • Many Americans feared that medical bills would lead to bankruptcy. More than a quarter of Americans (26.7%) were concerned that they would go bankrupt from medical bills.“Americans still see a clear connection between economic recovery and fixing health care,” said Lavizzo-Mourey. “We have consistently seen that people rate health reform as an important part of any plan to address the economy. As the nation continues to struggle to create new jobs and the debate over health reform drags on, people’s fears over how they will access and pay for care persist and are likely to get worse.” The RWJF Index ranges from 0 to 200 and is comprised of two sub-indices compiled by SHADAC. The Future Health Cost Concerns Index – which measures consumer confidence about accessing health care or health insurance in the future because of cost – has averaged 96.6 points so far this year. The Recent Health Cost Barriers Index gauges consumers’ recent experiences accessing health care because of cost concerns and averaged 101.1 points. The data for the indices are collected from questions added to the Surveys of Consumers, written to construct the RWJF Index. The survey items measure access to health care, health insurance and future concerns regarding health care. For more than 50 years, the Survey Research Center at the University of Michigan has conducted the Surveys of Consumers which has been an accurate indicator for understanding and forecasting changes in the national economy. The survey’s Index of Consumer Expectations is an official component of the U.S. Dept. of Commerce’s Index of Leading Economic Indicators.
A Publication of the American College of Healthcare Executives of North Texas Chapter | WINTER 2010
Warning Signs of a Distressed Hospital By Bob Vento
The typical hospital’s business model and revenue stream are so markedly different from other businesses, its level of financial distress can be difficult to diagnose. The following early warning signs will help hospital leaders more clearly identify and proactively react to financial distress. While no single metric can accurately identify early-stage distress in all hospitals, the following financial indicators can offer helpful insight into the outlook of a hospital that might be in trouble. Days Cash on Hand: Trend Analysis The number of days of cash a hospital has on hand is a classic solvency metric. Astute analysts will track long-term trends, as well as review individual instances. Analyzing multiple-year and/or monthly trend lines can add clarity to assessing hospital performance. Further investigation can help determine if large movements resulted from a favorable change, such as an increase in net patient revenue; a neutral change, such as an influx in cash from a real estate divestiture; or an unfavorable change, such as an investment loss. Benchmark: Simply stated, decreasing cash from year-toyear or month-to-month is a sign of financial distress. In addition, an interim snapshot that reveals the number of Days Cash on Hand at a point materially lower than historical patterns or bond covenant requirements may well be cause for immediate review, concern and follow-up.
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Current Ratio: Trend Analysis Just like Days Cash on Hand, reviewing a hospital’s current assets compared to its current liabilities can be more instructive as a trend than as a single snapshot, especially for early detection of financial distress. Developing a Current Ratio trend line for multiple years supplemented by a cycling of the most recent 12 months will likely provide compelling predictive value. Benchmark: In general, a trending decline that has reached 1.5 is an early sign of financial distress. Any single instance that is 1.0 or less warrants timely investigation. Accounts Receivable (AR) Days: Trend Analysis An increase in AR Days is often indicative of a hospital with poorly negotiated managed care contracts, unfavorable market changes, or ineffective collection practices. The challenge of reducing AR Days is both critically important and exceptionally challenging in the healthcare industry due to highly complex and unorganized payment systems. Reviewing a 12-to-18-month trend of AR Days can indicate a hospital’s ability to meet these challenges. Poor revenue cycle management will quickly exacerbate hospital financial distress. Benchmark: Any trend of increasing AR Days is a sign of trouble; however, an average of 55 days paired with a trending increase is especially concerning. This is even more concerning when coupled with growing bad debt, a relevant consideration as increasing numbers of American workers find themselves unemployed and uninsured. The quality of the AR aging file is another relevant factor when evaluating the revenue cycle management process. That is, continued on page 10
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workers find themselves unemployed and uninsured. The quality of the AR aging file is another relevant factor when evaluating the revenue cycle management process. That is, if AR aging categories by payer are worsening over time, the probability that liquidity will suffer is high – an obvious indicator of distress. Capital Expenditures vs. Annual Depreciation Capital improvements are critical for hospitals to recruit physicians, attract patients and deliver quality care. A hospital that does not upgrade its facility and equipment to offset the depreciation of its capital assets, especially in revenue-generating areas of the hospital, is headed for trouble over the longer term. The effect of delayed expenditures is compounding, and the cost to “catch up” on postponed improvements can be far greater than an initial investment. A hospital’s capital expenditures and annual depreciation should be calculated for each of the past 10 years to determine if it is keeping pace. Benchmark: If depreciation has outpaced capital improvements in more than three of the past 10 years – or if this is the case for the most recent two years – the hospital is likely experiencing distress. In addition, if the facility’s next scheduled capital project relies on funds exposed to market performance (investment income, grants from foundations or charitable donations), more serious financial issues may exist. This is especially true for hospitals nationwide that are facing challenges in accessing debt financing due to today’s tight credit markets. Internally Prepared Financial Statements Clear financial statements are critical for sound decision making. A hospital that prepares a confusing, inadequate, or poorly organized set of financial statements may be unable to analyze data, look beyond the numbers, or make informed decisions. Reviewing several hospital monthly financial statements can show data being used to make routine and strategic decisions. A fundamental benefit of financial statements is predictive value. Benchmark: General purpose financial statements that do not contain some narrative, lack compelling financial information (e.g., key statistics and cash flow data), and generally lack substance may be indicative of a hospital that is making decisions based on incomplete or erroneous information. Left unchecked, this can lead to unfavorable financial outcomes and ultimately financial distress. The challenges are great for our nation’s hospitals and health systems. Many need immediate intervention to prevent
crisis situations. Early detection and swift intervention can help ensure that: (a) communities maintain access to the healthcare services they need, and (b) risk is mitigated for financial stakeholders in the hospital. Bob Vento is a senior vice president for QHR Intensive Resources. For additional information on QHR’s consulting solutions, contact vice president Susan Hassell at (866) 371-4669. Reprinted with permission from Lancaster Pollard’s ‘The Capital Issue’ at www.lancasterpollard.com.
CALENDAR
January 29 ACHE Board Meeting
April 15 The Future of Healthcare Financing
Time: Location:
Time: Location: Host:
7:30 - 9:00 am The Health Industry Council Conference Room 3001 Skyway Circle N., Ste. 100 Irving, TX 75038
February 4 Networking Event Time: Location: Host:
5:30 pm Jaspers , Plano TX Dr Jeffrey Canose, MD, President of Texas Health Presbyterian
6:30-8:00 pm Baylor Hospital Folsom Room, 17th floor Dallas, TX Gail Maxwell Carolyn Mitchell Jessica Daw
April 23 BOG Exam Prep Course Time: 8:00 am-5:00 pm Location: The Health Industry Council Cost: $75.00
February 18 ACHE Job Fair Time: Location: Sponsors:
9:00 a.m. - 12:00 pm Medical City Hospital 7777 Forest Lane Dallas, TX 75230 City Hall - Building E Several area healthcare facilities will participate in our job fair
March 10 CEO Breakfast Time: 7:30 - 9:00 am Location: JPS Hospital Host: Robert Earley, CEO
March 18 Reinventing Customer Service in Healthcare Host:
Greg Butler
April 1 Networking Event Time:
5:00-7:30 pm
Have questions about a program or event? Email: info@northtexas.ache.org
ACHE of North Texas thanks the following Corporate Sponsors for assisting the organization’s mission. By sponsoring various events throughout the year, these sponsors are provided local and national exposure with an opportunity to showcase their organization, brand, career opportunities, products and services to the ACHE membership and its affiliates.