Author Archives: henrykotula

36 hospitals, health systems cutting jobs

Posted on by • Posted in Employee Layoffs, Health System, Hospital, Hospital Industry, Labor Spend Management, Operating Expense Reduction • Leave a comment
https://www.beckershospitalreview.com/finance/4-hospitals-health-systems-cutting-jobsjan19.html?origin=BHRSUN&utm_source=BHRSUN&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

A number of hospitals and health systems are reducing their workforces or jobs due to financial and operational challenges. 

Below are workforce reduction efforts or job eliminations announced this year. 

June

West Monroe, La.-based Glenwood Regional Medical Center, part of Dallas-based Steward Health Care, laid off 23 employees. Affected roles included leadership, a spokesperson for the hospital said in a statement shared with Becker’s. 

Cleveland-based University Hospitals is reducing its leadership structure by more than 10% as part of more than 300 layoffs. COO Paul Hinchey, MD, told Becker’s C-suite level leaders and vice presidents were included in the cuts. 

Portland-based Oregon Health & Science University told staff June 6 that it plans to lay off at least 500 employees, citing financial issues. The news follows the institution and Portland-based Legacy Health signing a binding, definitive agreement to come together as one health system under OHSU Health. 

May

The All of Us Research Program, a collaboration of the University of Arizona in Tucson and Phoenix-based Banner Health, plans to lay off 45 workers due to reduced federal research funding, according to an Arizona WARN notice filed May 28. The program, launched in 2018, is part of HHS’ National Institutes of Health.

Burlington, Mass.-based Tufts Medicine will lay off 174 employees due to industry challenges, the health system confirmed in a May 21 statement shared with Becker’s. The layoffs, which have varying effective dates, will primarily affect administrative and non-direct patient care roles. Some leadership roles were affected, a spokesperson told Becker’s. 

Doral, Fla.-based Sanitas Medical Center laid off 56 employees between May 17 and May 20. Some of the affected roles included nine care coordinators, one care educator, and two case managers, according to a May 20 WARN notice accessed by Becker’s.

Select Specialty Hospital in Longview, Texas, will close on or about June 30, affecting 94 employees, Becker’s has confirmed. The hospital, operated by Mechanicsburg, Pa.-based Select Medical, is a 32-bed, critical illness recovery facility.

White Rock Medical Center in Dallas laid off nearly 35% of its staff. The hospital temporarily stopped taking patients transported by emergency medical services due to the layoffs, The Dallas Morning News reported. It has since resumed accepting those patients.

Oakland-based Kaiser Foundation Hospitals is laying off 76 workers in California. The layoffs primarily affect employees in IT and marketing, according to regulatory documents filed with the state May 1.

April

Pittsburgh-based UPMC will lay off approximately 1,000 employees. The layoffs, which represent more than 1% of the health system’s 100,000 workforce will primarily affect nonclinical, administrative and non-member-facing employees. 

Union Springs, Ala.-based Bullock County Hospital laid off 95 employees beginning April 9, according to regulatory documents filed with the state. The layoffs occurred as Bullock seeks to become a rural emergency hospital and is ending psychiatric services as part of the shift, AL.com reported April 25.

Jackson Health System reduced compensation programs for senior leaders; laid off fewer than 25 people, including one hospital CEO; and froze many vacant positions, especially in support and nonclinical areas, a spokesperson for the Miami-based organization confirmed to Becker’s. President and CEO Carlos Migoya shared these efforts in a message to staff, citing financial challenges.

Coos Bay, Ore.-based Bay Area Hospital plans to conduct layoffs as it outsources its revenue cycle management operations, a spokesperson for the hospital confirmed to Becker’s. The transition will affect 27 positions.

Manchester, N.H.-based Catholic Medical Center plans to cut 142 positions, including 54 layoffs. An April 18 letter to employees from CMC president and CEO Alex Walker, obtained by Becker’s, said cuts would occur through the 54 staff eliminations, open position cuts, reduced hours, planned departures, and resource redeployment in satellite locations for CMC.

Marshfield (Wis.) Clinic Health System will lay off furloughed staff, effective in early May. The health system furloughed about 3% of its workforce in January, affecting positions mostly in non-patient-seeing departments, including leadership roles. 

Norwalk, Ohio-based Fisher-Titus Medical Center laid off some workers in nonclinical roles and reduced hours for others. Seven employees, about 0.5% of the health system’s workforce, were laid off  April 1. Work hours were reduced for another 10 positions, a hospital spokesperson told Becker’s.

March

Robbinsdale, Minn.-based North Memorial Health is laying off 103 employees in clinical and nonclinical roles, citing financial challenges. The layoffs affect several services across the two-hospital system. 

AHMC’s San Gabriel (Calif.) Valley Medical Center is laying off 62 workers, according to regulatory documents filed with the state March 13. The layoffs take effect May 13.

Miami-based North Shore Medical Center, part of Steward Health Care, started conducting layoffs as part of cuts to some of its programs amid the Dallas-based health system’s continued financial struggles. Around 152 workers represented by 1199SEIU were laid off, a union spokesperson confirmed. However that number could be higher as their members do not represent every employee at NSMC, the spokesperson said.

Oakland, Calif.-based Kaiser Foundation Hospitals is laying off more than 70 employees. The layoffs primarily affect those in IT roles.

February

Lion Star, the group that operates Nacogdoches (Texas) Memorial Hospital, is closing four of its clinics on March 22, which will result in fewer than 50 layoffs, a Lion Star spokesperson confirmed to Becker’s. No additional layoffs are planned.

Little Rock-based Arkansas Heart Hospital has laid off fewer than 50 employees since the beginning of 2024, citing low reimbursement rates. The layoffs affected lower-paying positions, Bruce Murphy, MD, CEO of the hospital, said, according to Arkansas Business.

Cincinnati-based Mercy Health will lay off some call center positions. The system attributed the move to its partnership with a third party to operate its enterprise contact center for primary care scheduling.

Ridgecrest (Calif.) Regional Hospital announced more layoffs to avoid closure. It is laying off 31 more employees, including seven licensed vocational nurses and four registered nurses, two months after it announced plans to lay off nearly 30 others and suspend its labor and delivery unit, Bakersfield.com reported Feb. 15.

Medford, Ore.-based Asante health system laid off about 3% of its workforce. The layoffs primarily affected administrative and support roles and were necessary to offset “financial headwinds” over the past several years, according to a report from NBC affiliate KOBI-TV, which is based on an internal memo sent to staff Feb. 9. 

Oakdale, Calif.-based Oak Valley Hospital District is scaling back services and laying off workers to improve its finances. The hospital said in a Feb. 2 statement shared with Becker’s that it will close its five-bed intensive care unit, discontinue its family support network department and lay off 28 employees, including those in senior management and supervisor positions. 

Chicago-based Rush University System for Health laid off an undisclosed number of workers in administrative and leadership positions, citing “financial headwinds affecting healthcare providers nationwide.” No additional information was provided about the layoffs, including the number of affected employees.

University of Chicago Medical Center laid off about 180 employees, or less than 2% of its roughly 13,000-person workforce. The majority of affected positions are not direct patient facing, the organization said in a statement shared with Becker’s.

Fountain Valley, Calif.-based MemorialCare laid off 72 workers due to restructuring efforts at its Long Beach (Calif.) Medical Center and Long Beach, Calif.-based Miller Children’s and Women’s Hospital. The layoffs include 13 positions at Long Beach Medical Center’s outpatient retail pharmacy, which is closing Feb. 2, a spokesperson for MemorialCare said in a statement shared with Becker’s.

January

George Washington University Hospital in Washington, D.C., part of King of Prussia, Pa.-based Universal Health Services, is laying off “less than 3%” of its employees. The move is attributed to restructuring efforts.

Amarillo-based Northwest Texas Healthcare System, also part of Universal Health Services, announced plans to lay off a “limited number of positions.” The move is attributed to restructuring efforts. 

Lehigh Valley Health Network is cutting its chiropractic services and laying off 10 chiropractors. The layoffs are effective April 12 and due to restructuring. The Allentown, Pa.-based health system has 10 chiropractic locations, according to its website. 

Central Maine Healthcare is laying off 45 employees as part of management reorganization. The Lewiston-based system, which also ended urgent care services at its Maine Urgent Care on Sabattus Street in Lewiston on Jan. 12, has 3,100 employees total.

University of Vermont Health Network, based in Burlington, is cutting 130 open positions. The move is part of the health system’s efforts to reduce expenses by $20 million.

Med-Trans, a medical transport provider based in Lewisville, Texas, closed its UF Health ShandsCair base serving Gainesville, Fla.-based UF Health Shands Hospital on Jan. 10 due to decreased transportation demands. The move also resulted in layoffs, a spokesperson for UF Health, the hospital’s parent company, told Becker’s in a statement. 

RWJBarnabas Health, based in West Orange, N.J., is laying off 79 employees, according to documents filed with the state on Jan. 8. The layoffs are effective March 31 and April 5. A spokesperson for the health system told Becker’s that 74 of the positions were “time-limited information technology training job functions.” The other layoffs were due to closure of an urgent care center.

BIG INSURANCE 2023: Revenues reached $1.39 trillion thanks to taxpayer-funded Medicaid and Medicare Advantage businesses

Posted on by • Posted in 2024 Election Issues, ACA, Executive Compensation, Health Insurance Denial, Health Insurance Industry, Healthcare Reform, Market Consolidation, Market Power, Market Share, Medicare, Medicare Advantage, Medicare Supplement, Net Income, Out of Pocket Expenses, Pharmaceutical Industry, Pharmacy Benefits Management, Profit Margin • Leave a comment
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The Affordable Care Act turned 14 on March 23. It has done a lot of good for a lot of people, but big changes in the law are urgently needed to address some very big misses and consequences I don’t believe most proponents of the law intended or expected. 

At the top of the list of needed reforms: restraining the power and influence of the rapidly growing corporations that are siphoning more and more money from federal and state governments – and our personal bank accounts – to enrich their executives and shareholders.

I was among many advocates who supported the ACA’s passage, despite the law’s ultimate shortcomings. It broadened access to health insurance, both through government subsidies to help people pay their premiums and by banning prevalent industry practices that had made it impossible for millions of American families to buy coverage at any price. It’s important to remember that before the ACA, insurers routinely refused to sell policies to a third or more applicants because of a long list of “preexisting conditions” – from acne and heart disease to simply being overweight – and frequently rescinded coverage when policyholders were diagnosed with cancer and other diseases.

While insurance company executives were publicly critical of the law, they quickly took advantage of loopholes (many of which their lobbyists created) that would allow them to reap windfall profits in the years ahead – and they have, as you’ll see below. 

Among other things, the ACA made it unlawful for most of us to remain uninsured (although Congress later repealed the penalty for doing so). But, notably, it did not create a “public option” to compete with private insurers, which many advocates and public policy experts contended would be essential to rein in the cost of health insurance. Many other reform advocates insisted – and still do – that improving and expanding the traditional Medicare program to cover all Americans would be more cost-effective and fair. 

I wrote and spoke frequently as an industry whistleblower about what I thought Congress should know and do, perhaps most memorably in an interview with Bill Moyers. During my Congressional testimony in the months leading up to the final passage of the bill in 2010, I told lawmakers that if they passed it without a public option and acquiesced to industry demands, they might as well call it “The Health Insurance Industry Profit Protection and Enhancement Act.”

A health plan similar to Medicare that could have been a more affordable option for many of us almost happened, but at the last minute, the Senate was forced to strip the public option out of the bill at the insistence of Sen. Joe Lieberman (I-Connecticut), who died on March 27, 2024. The Senate did not have a single vote to spare as the final debate on the bill was approaching, and insurance industry lobbyists knew they could kill the public option if they could get just one of the bill’s supporters to oppose it. So they turned to Lieberman, a former Democrat who was Vice President Al Gore’s running mate in 2000 and who continued to caucus with Democrats. It worked. Lieberman wouldn’t even allow a vote on the bill if it created a public option. Among Lieberman’s constituents and campaign funders were insurance company executives who lived in or around Hartford, the insurance capital of the world. Lieberman would go on to be the founding chair of a political group called No Labels, which is trying to find someone to run as a third-party presidential candidate this year.

The work of Big Insurance and its army of lobbyists paid off as insurers had hoped. The demise of the public option was a driving force behind the record profits – and CEO pay – that we see in the industry today.

The good effects of the ACA:

Nearly 49 million U.S. residents (or 16%) were uninsured in 2010. The law has helped bring that down to 25.4 million, or 8.3% (although a large and growing number of Americans are now “functionally uninsured” because of unaffordable out-of-pocket requirements, which President Biden pledged to address in his recent State of the Union speech). 

The ACA also made it illegal for insurers to refuse to sell coverage to people with preexisting conditions, which even included birth defects, or charge anyone more for their coverage based on their health status; it expanded Medicaid (in all but 10 states that still refuse to cover more low-income individuals and families); it allowed young people to stay on their families’ policies until they turn 26; and it required insurers to spend at least 80% of our premiums on the health care goods and services our doctors say we need (a well-intended provision of the law that insurers have figured out how to game).

The not-so-good effects of the ACA: 

As taxpayers and health care consumers, we have paid a high price in many ways as health insurance companies have transformed themselves into massive money-making machines with tentacles reaching deep into health care delivery and taxpayers’ pockets. 

To make policies affordable in the individual market, for example, the government agreed to subsidize premiums for the vast majority of people seeking coverage there, meaning billions of new dollars started flowing to private insurance companies. (It also allowed insurers to charge older Americans three times as much as they charge younger people for the same coverage.) Even more tax dollars have been sent to insurers as part of the Medicaid expansion. That’s because private insurers over the years have persuaded most states to turn their Medicaid programs over to them to administer.

Insurers have bulked up incredibly quickly since the ACA was enacted through consolidation, vertical integration, and aggressive expansion into publicly financed programs – Medicare and Medicaid in particular – and the pharmacy benefit space. Premiums and out-of-pocket requirements, meanwhile, have soared.

We invite you to take a look at how the ascendency of health insurers over the past several years has made a few shareholders and executives much richer while the rest of us struggle despite – and in some cases because of – the Affordable Care Act.

BY THE NUMBERS

In 2010, we as a nation spent $2.6 trillion on health care. This year we will spend almost twice as much – an estimated $4.9 trillion, much of it out of our own pockets even with insurance. 

In 2010, the average cost of a family health insurance policy through an employer was $13,710. Last year, the average was nearly $24,000, a 75% increase.

The ACA, to its credit, set an annual maximum on how much those of us with insurance have to pay before our coverage kicks in, but, at the insurance industry’s insistence, it goes up every year. When that limit went into effect in 2014, it was $12,700 for a family. This year, it has increased by 48%, to $18,900. That means insurers can get away with paying fewer claims than they once did, and many families have to empty their bank accounts when a family member gets sick or injured. Most people don’t reach that limit, but even a few hundred dollars is more than many families have on hand to cover deductibles and other out-of-pocket requirements. Now 100 million Americans – nearly one of every three of us – are mired in medical debt, even though almost 92% of us are presumably “covered.” The coverage just isn’t as adequate as it used to be or needs to be.

Meanwhile, insurance companies had a gangbuster 2023. The seven big for-profit U.S. health insurers’ revenues reached $1.39 trillion, and profits totaled a whopping $70.7 billion last year.

SWEEPING CHANGE, CONSOLIDATION–AND HUGE PROFITS FOR INVESTORS

Insurance company shareholders and executives have become much wealthier as the stock prices of the seven big for-profit corporations that control the health insurance market have skyrocketed.

NOTE: The Dow Jones Industrial Average is listed on this chart as a reference because it is a leading stock market index that tracks 30 of the largest publicly traded companies in the United States.

REVENUES collected by those seven companies have more than tripled (up 346%), increasing by more than $1 trillion in just the past ten years.

PROFITS (earnings from operations) have more than doubled (up 211%), increasing by more than $48 billion.

The CEOs of these companies are among the highest paid in the country. In 2022, the most recent year the companies have reported executive compensation, they collectively made $136.5 million.

U.S. HEALTH PLAN ENROLLMENT

Enrollment in the companies’ health plans is a mix of “commercial” policies they sell to individuals and families and that they manage for “plan sponsors” – primarily employers and unions – and government/enrollee-financed plans (Medicare, Medicaid, Tricare for military personnel and their dependents and the Federal Employee Health Benefits program).

Enrollment in their commercial plans grew by just 7.65% over the 10 years and declined significantly at UnitedHealth, CVS/Aetna and Humana. Centene and Molina picked up commercial enrollees through their participation in several ACA (Obamacare) markets in which most enrollees qualify for federal premium subsidies paid directly to insurers.

While not growing substantially, commercial plans remain very profitable because insurers charge considerably more in premiums now than a decade ago.

(1) The 2013 total for CVS/Aetna was reported by Aetna before its 2018 acquisition by CVS. (2) Humana announced last year it is exiting the commercial health insurance business. (3) Enrollment in the ACA’s marketplace plans account for all of Molina’s commercial business.

By contrast, enrollment in the government-financed Medicaid and Medicare Advantage programs has increased 197% and 167%, respectively, over the past 10 years.

(1) The 2013 total for CVS/Aetna was reported by Aetna before its 2018 acquisition by CVS.

Of the 65.9 million people eligible for Medicare at the beginning of 2024, 33 million, slightly more than half, enrolled in a private Medicare Advantage plan operated by either a nonprofit or for-profit health insurer, but, increasingly, three of the big for-profits grabbed most new enrollees. 

Of the 1.7 million new Medicare Advantage enrollees this year, 86% were captured by UnitedHealth, Humana and Aetna. 

Those three companies are the leaders in the Medicare Advantage business among the for-profit companies, and, according to the health care consulting firm Chartis, are taking over the program “at breakneck speed.”

(1) The 2013 total for CVS/Aetna was reported by Aetna before its 2018 acquisition by CVS. (2,3) Centene’s and Molina’s totals include Medicare Supplement; they do not break out enrollment in the two Medicare categories separately.

It is worth noting that although four companies saw growth in their Medicare Supplement enrollment over the decade, enrollment in Medicare Supplement policies has been declining in more recent years as insurers have attracted more seniors and disabled people into their Medicare Advantage plans.

OTHER FEDERAL PROGRAMS

In addition to the above categories, Humana and Centene have significant enrollment in Tricare, the government-financed program for the military. Humana reported 6 million military enrollees in 2023, up from 3.1 million in 2013. Centene reported 2.8 million in 2023. It did not report any military enrollment in 2013.

Elevance reported having 1.6 million enrollees in the Federal Employees Health Benefits Program in 2023, up from 1.5 million in 2013. That total is included in the commercial enrollment category above. 

PBMs

As with Medicare Advantage, three of the big seven insurers control the lion’s share of the pharmacy benefit market (and two of them, UnitedHealth and CVS/Aetna, are also among the top three in signing up new Medicare Advantage enrollees, as noted above). CVS/Aetna’s Caremark, Cigna’s Express Scripts and UnitedHealth’s Optum Rx PBMs now control 80% of the market.

At Cigna, Express Scripts’ pharmacy operations now contribute more than 70% to the company’s total revenues. Caremark’s pharmacy operations contribute 33% to CVS/Aetna’s total revenues, and Optum Rx contributes 31% to UnitedHealth’s total revenues. 

WHAT TO DO AND WHERE TO START

The official name of the ACA is the Patient Protection and Affordable Care Act. The law did indeed implement many important patient protections, and it made coverage more affordable for many Americans.

But there is much more Congress and regulators must do to close the loopholes and dismantle the barriers erected by big insurers that enable them to pad their bottom lines and reward shareholders while making health care increasingly unaffordable and inaccessible for many of us.

Several bipartisan bills have been introduced in Congress to change how big insurers do business. They include curbing insurers’ use of prior authorization, which often leads to denials and delays of care; requiring PBMs to be more “transparent” in how they do business and banning practices many PBMs use to boost profits, including spread pricing, which contributes to windfall profits; and overhauling the Medicare Advantage program by instituting a broad array of consumer and patient protections and eliminating the massive overpayments to insurers. 

And as noted above, President Biden has asked Congress to broaden the recently enacted $2,000-a-year cap on prescription drugs to apply to people with private insurance, not just Medicare beneficiaries. That one policy change could save an untold number of lives and help keep millions of families out of medical debt. (A coalition of more than 70 organizations and businesses, which I lead, supports that, although we’re also calling on Congress to reduce the current overall annual out-of-pocket maximum to no more than $5,000.) 

I encourage you to tell your members of Congress and the Biden administration that you support these reforms as well as improving, strengthening and expanding traditional Medicare. You can be certain the insurance industry and its allies are trying to keep any reforms that might shrink profit margins from becoming law. 

Risant Health plans to acquire North Carolina system

Posted on by • Posted in Definitive Agreement, Evidence-Based Care, Health System, Hospital, Hospital Industry, Kaiser Permanente, Market Consolidation, Mergers & Acquisitions, Risant Health, Value-Based Healthcare • Leave a comment
https://www.beckershospitalreview.com/hospital-transactions-and-valuation/risant-health-plans-to-acquire-north-carolina-system.html?origin=CFOE&utm_source=CFOE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

Risant Health, a nonprofit formed under Oakland, Calif.-based Kaiser Permanente, has signed a definitive agreement to acquire Greensboro, N.C.-based Cone Health.

The news comes less than three months after Risant acquired its first health system, Danville, Pa.-based Geisinger Health. If the transaction closes, Cone Health will operate independently as a regional and community-based health system under Risant, which supports organizations with technology and services to improve outcomes and lower care costs in diverse business models.“Cone Health’s impressive work for decades in moving value-based care forward aligns so well with Risant Health’s vision for the future of healthcare. Their longstanding success and deep commitment to providing high-quality care to North Carolina communities make them an ideal fit to become a part of Risant Health,” CEO, Jaewon Ryu, MD, said in a June 21 news release. “We will work together to share our industry-leading expertise and innovation to expand access to value-based care to more people in the communities we serve.” 

Cone Health includes four acute-care hospitals, a behavioral health facility, three ambulatory surgery centers, eight urgent care centers and more than 120 physician practices, according to its website. It has more than 13,000 employees and over 700 physicians, along with 1,800 partner physicians. “As part of Risant Health, Cone Health will build upon its long track record of success making evidence-based health care more accessible and affordable for more people. The people across the Triad will be among the first to benefit,” Cone Health President and CEO Mary Jo Cagle, MD, said. 

Cone Health will maintain its brand, name and mission, and maintain its own board, CEO and leadership team. It will continue to work with health plans, provider organizations and independent physicians. Dr. Cagle said she does not anticipate changes in the types of care Cone Health provides as a result of becoming part of Risant. The proposed transaction is subject to regulatory approvals and closing conditions.

Pandemic rent inflation is still working its way through the economy

Posted on by • Posted in Consumer Price Index (CPI), Inflation, Pandemic, Property Rent, Rent • Leave a comment
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Everybody is waiting for rent relief to help bring overall inflation down. It might take longer than conventional wisdom suggests.

Why it matters: 

A surge in market rents in 2021 and 2022 still has a ways to go in fully working its way through the economy, despite moderation in market rents since then, a new paper from a Boston Fed economist finds.

  • As a result, rents are on track to exert upward pressure on overall inflation for quite a while to come, the paper argues, a headwind to bringing inflation down to the Fed’s 2% target.

The big picture: 

Rents soared during and immediately after the pandemic as Americans sought bigger homes and were flush with higher paychecks and pent-up savings. But private-sector indicators of market rents rose much faster than the rent numbers calculated for the Consumer Price Index and other inflation indicators at that time.

  • That’s because market rent data only encompasses people signing new leases. Many existing tenants saw no immediate change — perhaps because they had long-term leases in place, or landlords were reluctant to raise rent on existing tenants, or local laws constrained rent hikes.
  • But over time, those leases turn over, with more renters paying the higher market prices. That process is still underway, even though market rents have risen less in 2023 and 2024, according to the analysis from the Boston Fed’s Christopher D. Cotton.

By the numbers: 

Compared to 2019 levels, there is a 6 percentage point gap between rents on new leases and the shelter inflation shown in the CPI.

  • The process of higher market rents filtering through the inflation data is on track to add 0.7 percentage point to the core Consumer Price Index over the next year and 0.3 percentage points to core inflation using the Fed’s preferred gauge, Cotton finds.
  • “The fact that market rents remain 6% higher than CPI-shelter relative to pre-pandemic implies that CPI-shelter will grow more quickly than market rents for the foreseeable future,” Cotton tells Axios.

Of note: 

Fed vice chair Philip Jefferson noted last month that “market rents adjust more quickly to economic conditions than what landlords charge their existing tenants.”

  • “This lag suggests that the large increase in market rents during the pandemic is still being passed through to existing rents and may keep housing services inflation elevated for a while longer,” Jefferson said.

The intrigue: 

One risk to watch is that even once the pandemic-era rent inflation has worked its way through the data, there could be a new surge in market rents due to under-supply.

  • Construction of new multifamily housing has plunged below pre-pandemic levels in recent months as builders grapple with high interest rates.

48 health systems with strong finances

Posted on by • Posted in Credit Quality, Credit Ratings, Credit Report, Financial Ratios, Financial Reporting, Financial Stewardship, Financial Strength, Financial Viability, Health System, Hospital, Hospital Industry • Leave a comment
https://www.beckershospitalreview.com/finance/20-health-systems-with-strong-finances.html?origin=BHRE&utm_source=BHRE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

Here are 48 health systems with strong operational metrics and solid financial positions, according to reports from credit rating agencies Fitch Ratings and Moody’s Investors Service released in 2024.

AdventHealth has an “AA” rating and stable outlook with Fitch. The rating is based on the Altamonte Springs, Fla.-based system’s competitive market position—especially in its core Florida markets—and its financial profile, Fitch said.

Advocate Health members Advocate Aurora Health and Atrium Health have “Aa3” ratings and positive outlooks with Moody’s. The ratings are supported by the Charlotte, N.C.-based system’s significant scale, strong market share across several major metro areas, and good financial performance and liquidity, Moody’s said.

Ann & Robert H. Lurie Children’s Hospital of Chicago has an “AA” rating and stable outlook with Fitch. The rating is supported by the system’s strong balance sheet with low leverage ratios derived from modest debt, Fitch said.

Avera Health has an “AA-” rating and a stable outlook with Fitch. The rating reflects the Sioux Falls, S.D.-based system’s strong operating risk and financial profile assessments, and significant size and scale, Fitch said.

Beacon Health System has an “AA-” rating and stable outlook with Fitch. Fitch said the rating reflects the strength of the South Bend, Ind.-based system’s balance sheet.

Carle Health has an “AA-” rating and stable outlook with Fitch. The rating reflects the Urbana, Ill.-based system’s distinctly leading market position over a broad service area and Fitch’s expectation that the system will sustain its strong capital-related ratios in the context of the system’s midrange revenue defensibility and strong operating risk profile assessments.

Carilion Clinic has an “Aa3” rating and stable outlook with Moody’s. The rating reflects the Roanoke, Va.-based system’s scale, regional significance as a tertiary referral system with broad geographic capture, and a highly integrated physician base with a well-defined culture, Moody’s said.

Cedars-Sinai Health System has an “AA-” rating and a stable outlook with Fitch. The rating reflects the Los Angeles-based system’s consistent historical profitability and its strong liquidity metrics, historically supported by significant philanthropy, Fitch said.

Children’s Health has an “Aa3” rating and stable outlook with Moody’s. The rating reflects the Dallas-based system’s continued strong performance from a focus on high margin and tertiary services, as well as a distinctly leading market share, Moody’s said.

Children’s Hospital Medical Center of Akron (Ohio) has an “Aa3” rating and stable outlook with Moody’s. The rating reflects the system’s large primary care physician network, long-term collaborations with regional hospitals, and leading market position as its market’s only dedicated pediatric provider, Moody’s said.

Children’s Hospital of Orange County has an “AA-” rating and a stable outlook with Fitch. The rating reflects the Orange, Calif.-based system’s position as the leading provider for pediatric acute care services in Orange County, a position solidified through its adult hospital and regional partnerships, ambulatory presence, and pediatric trauma status, Fitch said.

Children’s Minnesota has an “AA” rating and stable outlook with Fitch. The rating reflects the Minneapolis-based system’s strong balance sheet, robust liquidity position, and dominant pediatric market position, Fitch said.

Cincinnati Children’s Hospital Medical Center has an “Aa2” rating and stable outlook with Moody’s. The rating is supported by its national and international reputation in clinical services and research, Moody’s said.

Cleveland Clinic has an “Aa2” rating and stable outlook with Moody’s. The rating reflects the system’s strength as an international brand in highly complex clinical care and research and centralized governance model, the ratings agency said.

Cook Children’s Medical Center has an “Aa2” rating and stable outlook with Moody’s. The ratings agency said the Fort Worth, Texas-based system will benefit from revenue diversification through its sizable health plan, large physician group, and an expanding North Texas footprint.

El Camino Health has an “AA” rating and a stable outlook with Fitch. The rating reflects the Mountain View, Calif.-based system’s strong operating profile assessment with a history of generating double-digit operating EBITDA margins anchored by a service area that features strong demographics as well as a healthy payer mix, Fitch said.

Froedtert ThedaCare Health has an “AA” rating and stable outlook with Fitch. The rating reflects the Milwaukee-based system’s solid market position, track record of strong utilization and operations, and strong financial profile, Fitch said.

Hoag Memorial Hospital Presbyterian has an “AA” rating and stable outlook with Fitch. The Newport Beach, Calif.-based system’s rating is supported by its strong operating risk assessment, leading market position in its immediate service area, and strong financial profile, Fitch said.

Inspira Health has an “AA-” rating and stable outlook with Fitch. The rating reflects Fitch’s expectation that the Mullica Hill, N.J.-based system will return to strong operating cash flows following the operating challenges of 2022 and 2023, as well as the successful integration of Inspira Medical Center of Mannington (formerly Salem Medical Center).

JPS Health Network has an “AA” rating and stable outlook with Fitch. The rating reflects the Fort Worth, Texas-based system’s sound historical and forecast operating margins, the ratings agency said.

Mass General Brigham has an “Aa3” rating and stable outlook with Moody’s. The rating reflects the Somerville, Mass.-based system’s strong reputation for clinical services and research at its namesake academic medical center flagships that drive excellent patient demand and help it maintain a strong market position, Moody’s said.

Mayo Clinic has an “Aa2” rating and stable outlook with Moody’s. The rating reflects the Rochester, Minn.-based system’s preeminent reputation for clinical care and research, including new discoveries and cutting-edge treatment, Moody’s said.

McLaren Health Care has an “AA-” rating and stable outlook with Fitch. The rating reflects the Grand Blanc, Mich.-based system’s leading market position over a broad service area covering much of Michigan, the ratings agency said.

Med Center Health has an “AA-” rating and stable outlook with Fitch. The rating reflects the Bowling Green, Ky.-based system’s strong operating risk assessment and leading market position in a primary service area with favorable population growth, Fitch said.

Memorial Healthcare System has an “Aa3” rating and stable outlook with Moody’s. Moody’s said the rating reflects that the Hollywood, Fla.-based system will continue to benefit from good strategic positioning of its large, diversified geographic footprint.

Memorial Hermann Health System has an “Aa3” rating and stable outlook with Moody’s. The rating reflects the Houston-based system’s leading and expanding market position and strong demand in a growing region, Moody’s said.

Methodist Health System has an “Aa3” rating and stable outlook with Moody’s. Moody’s said the rating reflects the Dallas-based system’s consistently strong operating performance, excellent liquidity, and very good market position.

Nationwide Children’s Hospital has an “Aa2” rating and stable outlook with Moody’s. The rating reflects the Columbus, Ohio-based system’s strong market position in pediatric services, growing statewide and national reputation, and continued expansion strategies.

Nicklaus Children’s Hospital has an “AA-” rating and stable outlook with Fitch. The rating is supported by the Miami-based system’s position as the “premier pediatric hospital in South Florida with a leading and growing market share,” Fitch said.

North Mississippi Health Services has an “AA” rating and stable outlook with Fitch. The rating reflects the Tupelo-based system’s strong cash position and strong market position with a leading market share in its primary services area, Fitch said.

Novant Health has an “AA-” rating and stable outlook with Fitch. The ratings agency said the Winston-Salem, N.C.-based system’s recent acquisition of three South Carolina hospitals from Dallas-based Tenet Healthcare will be accretive to its operating performance as the hospitals are highly profited and located in areas with growing populations and good income levels.

Oregon Health & Science University has an “Aa3” rating and stable outlook with Moody’s. The rating reflects the Portland-based system’s top-class academic, research, and clinical capabilities, Moody’s said.

Orlando (Fla.) Health has an “AA-” rating and stable outlook with Fitch. The rating reflects the health system’s strong and consistent operating performance and a growing presence in a demographically favorable market, Fitch said.

Parkland Health has an “AA-” rating and stable outlook with Fitch. The rating reflects Fitch’s expectation that the Dallas-based system will remain the leading provider of public (safety net) services in the vast Dallas County service area, supported by its tax levy.

Presbyterian Healthcare Services has an “AA” rating and stable outlook with Fitch. The Albuquerque, N.M.-based system’s rating is driven by a strong financial profile combined with a leading market position with broad coverage in both acute care services and health plan operations, Fitch said.

Rush University System for Health has an “AA-” rating and stable outlook with Fitch. The rating reflects the Chicago-based system’s strong financial profile and an expectation that operating margins will rebound despite ongoing macro labor pressures, the rating agency said.

Saint Francis Healthcare System has an “AA” rating and stable outlook with Fitch. The rating reflects the Cape Girardeau, Mo.-based system’s strong financial profile, characterized by robust liquidity metrics, Fitch said.

Saint Luke’s Health System has an “Aa2” rating and stable outlook with Moody’s. The Kansas City, Mo.-based system’s rating was upgraded from “A1” after its merger with St. Louis-based BJC HealthCare was completed in January.

Salem (Ore.) Health has an “AA-” rating and stable outlook with Fitch. The rating reflects the system’s dominant marketing position in a stable service area with good population growth and demand for acute care services, Fitch said.

Seattle Children’s Hospital has an “AA” rating and a stable outlook with Fitch. The rating reflects the system’s strong market position as the only children’s hospital in Seattle and provider of pediatric care to an area that covers four states, Fitch said.

SSM Health has an “AA-” rating and stable outlook with Fitch. The St. Louis-based system’s rating is supported by a strong financial profile, multistate presence and scale with good revenue diversity, Fitch said.

St. Elizabeth Medical Center has an “AA” rating and stable outlook with Fitch. The rating reflects the Edgewood, Ky.-based system’s strong liquidity, leading market position, and strong financial management, Fitch said.

Stanford Health Care has an “Aa3” rating and positive outlook with Moody’s. The rating reflects the Palo Alto, Calif.-based system’s clinical prominence, patient demand, and its location in an affluent and well-insured market, Moody’s said.

UChicago Medicine has an “AA-” rating and stable outlook with Fitch. The rating reflects the system’s strong financial profile in the context of its broad and growing reach for high-acuity services, Fitch said.

University Health has an “AA+” rating and stable outlook with Fitch. The San Antonio-based system’s outlook is based on the Bexar County Hospital District’s significant tax margin, good cost management, and strong leverage position relative to its liquidity and outstanding debt.

University of Colorado Health has an “AA” rating and stable outlook with Fitch. The Aurora-based system’s rating reflects a strong financial profile benefiting from a track record of robust operating margins and the system’s growing share of a growth market anchored by its position as the only academic medical center in the state, Fitch said.

VCU Health has an “Aa3” rating and stable outlook with Moody’s. The rating reflects the Richmond, Va.-based system’s status as one of Virginia’s leading academic medical centers and essential role as its largest safety net provider, supporting excellent patient demand at high acuity levels, Moody’s said.

Willis-Knighton Medical Center has an “AA-” rating and positive outlook with Fitch. The outlook reflects the Shreveport, La.-based system’s improving operating performance relative to the past two fiscal years combined with Fitch’s expectation for continued improvement in 2024 and beyond.

Walgreens pursues provider status for pharmacists

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Walgreens is on a mission to attain provider status for its pharmacists. 

An abundance of research has concluded that patients crave and care improves with broader scopes of practice for pharmacists. It’s an uphill battle though as some organizations lobby against scope expansions. 

Walgreens, the nation’s second largest pharmacy company (behind CVS), is going full steam ahead to grow job descriptions for its 26,000-some pharmacists. 

Mary Langowski, Walgreens Boots Alliance’s executive vice president and U.S. healthcare president, said pharmacists are well positioned to take on extra duties and tackle obstacles made by workforce shortages. 

She raised the example of blood pressure screenings, reasoning that it makes more sense for pharmacists to take on this role than primary care physicians, who are already burnt out. 

“To the extent we can create better, faster, cheaper pharmacy operations, so that our pharmacists can do more and more and more, that’s the ideal state,” Ms. Langowski said at AHIP’s 2024 conference in Las Vegas. 

Before this “ideal state” can come alive, advocates for expanding pharmacist scopes of practice have to first contend with regulatory and reimbursement constraints. Some organizations argue that physicians have more training in clinical settings than pharmacists, but Ms. Langowski said it isn’t an either/or, but a both/and. 

“We want to partner with physicians,” she said. “This is all totally complimentary to the rest of the activity that’s going on in the healthcare system.”

“There’s a lot of old paradigms out there, and a lot of old regulatory regimes and a lot of entrenched interests that are making it difficult for us to make progress on that, but we’re gonna keep fighting on it,” Ms. Langowski said. “It’s so important for us to kind of crack that open for pharmacists.”

University Hospitals to cut 300+ jobs, including some VP, C-suite roles

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Citing financial challenges, Cleveland-based University Hospitals is reducing its leadership structure by more than 10% as part of more than 300 layoffs.

Rising costs of supplies, labor and purchase services, and reduced Medicare reimbursement rates, have affected UH and various other systems, according to COO Paul Hinchey, MD. 

“All of that’s creating significant downward pressure on our revenue,” Dr. Hinchey told Becker’s. 

The news from UH follows a national trend of hospitals facing significant headwinds. Kaufman Hall found in early June that 40% of hospitals in the U.S. are still losing money. 

At UH, revenue has increased nearly 9% year over year due to various changes, such as increased access for patients and implementing a new EHR system, according to UH. 

“[However], in spite of our efforts and being successful in growth, that downward pressure on revenue and the increasing prices is pinching our margin,” said Dr. Hinchey.

Dr. Hinchey said the health system has been optimizing operations since the end of the pandemic. 

“We took a look at our cost structure and recognized we needed to get our cost structure down,” he said. “We’ve done a couple initiatives that we put under the auspices of a Medicare break-even initiative to try to drive down our cost structure.”

Some actions already taken have included increasing efficiency, consolidating service lines and closing hospitals in Bedford and Richmond Heights, according to UH.

Most recently, the health system identified an opportunity to make cuts to leadership. Dr. Hinchey said C-suite level leaders and vice presidents were included in the cuts. 

“These decisions are never easy,” Cliff Megerian, MD, CEO and Jane and Henry Meyer Chief Executive Officer Distinguished Chair, said in a news release. “The important thing is that we make these strategic moves now so we can continue to serve our community and fulfill our mission for decades to come. We are thankful for our hometown team that delivers lifesaving care to our neighbors, friends and relatives each and every day.”

Dr. Hinchey said UH began notifying employees of the layoffs on June 17. Affected workers will receive a severance package aligned with their roles and tenure.