Category Archives: Operating Margin

45 health systems with strong finances

Posted on by • Posted in Credit Quality, Credit Ratings, Financial Reserves, Financial Stewardship, Financial Strength, Financial Viability, Health System, Hospital, Hospital Industry, Net Income, Nonoperating Income, Operating Expense Reduction, Operating Expenses, Operating Income, Operating Margin, Operating Metrics, Operating Performance, Operating Revenue • Leave a comment
https://www.beckershospitalreview.com/finance/35-health-systems-with-strong-finances.html?origin=RCME&utm_source=RCME&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

Here are 45 health systems with strong operational metrics and solid financial positions, according to reports from credit rating agencies Fitch Ratings, Moody’s Investors Service and S&P Global in 2023. 

Note: This is not an exhaustive list. Health system names were compiled from credit rating reports.

1. AdventHealth has an “AA” rating and stable outlook with Fitch. The rating reflects the  Altamonte Springs, Fla.-based system’s strong financial profile, characterized by still-adequate liquidity and moderate leverage, typically strong and highly predictable profitability, Fitch said. 

2. AnMed Health has an “AA-” rating and stable outlook with Fitch. The Anderson, S.C.-based system has maintained strong performance through the COVID-19 pandemic and current labor market pressures, Fitch said.  

3. Atrium Health has an “AA-” and stable outlook with S&P Global. The Charlotte, N.C.-based system’s rating reflects a robust financial profile, growing geographic diversity and expectations that management will continue to deploy capital with discipline. 

4. Banner Health has an “AA-” and stable outlook with Fitch. The Phoenix-based system’s rating highlights the strength of its core hospital delivery system and growth of its insurance division, Fitch said. 

5. BayCare Health System has an “AA” rating and stable outlook with Fitch. The Tampa, Fla.-based system’s rating reflects its excellent financial profile supported by its leading market position in a four-county area and the ability to sustain a solid operating outlook in the face of inflationary sector headwinds, Fitch said. 

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

7. Berkshire Health has an “AA-” rating and stable outlook with Fitch. The Pittsfield, Mass.-based system has a strong financial profile, solid liquidity and modest leverage, according to Fitch. 

8. Cape Cod Healthcare has an “AA-” and stable outlook with Fitch. The Hyannis, Mass.-based system’s rating reflects a dominant market position in its service area and historically solid operating results, the rating agency said. 

9. 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, Fitch said. 

10.CaroMont Health has an “AA-” rating and stable outlook with S&P Global. The Gastonia, N.C.-based system has a healthy financial profile and robust market share in a competitive region.  

11. CentraCare has an “AA-” rating and stable outlook with Fitch. The St. Cloud, Minn.-based system has a leading market position, and its management’s focus on addressing workforce pressures, patient access and capacity constraints will improve operating margins over the medium term, Fitch said. 

12. Children’s Minnesota has an “AA” rating and stable outlook with Fitch. The Minneapolis-based system’s broad reach within the region continues to support long-term sustainability as a market leader and preferred provider for children’s health care, Fitch said. 

13. Concord (N.H.) Hospital has an “AA-” rating and stable outlook with Fitch. The rating reflects the strength of Concord’s leverage and liquidity assessment and Fitch’s assessment that two recently acquired hospitals will be strategically and financially accretive. 

14. Cone Health has an “AA” rating and stable outlook with Fitch. The rating reflects the expectation that the Greensboro, N.C.-based system will gradually return to stronger results in the medium term, the rating agency said.

15. Cottage Health has an “AA-” rating and stable outlook with Fitch. The rating reflects the Santa Barbara, Calif.-based system’s leading market position and broad reach in a service area that exhibits modest population growth but consistently high demand for acute care services, Fitch said. 

16. El Camino Health has an “AA-” rating and stable outlook with Fitch. The Mountain View, Calif.-based system has a history of generating double-digit operating EBITDA margins, driven by a solid market position that features strong demographics and a very healthy payer mix, Fitch said. 

17. Froedtert Health has an “AA” rating and stable outlook with Fitch. The rating reflects the Milwaukee-based system’s maintenance of a strong, albeit compressed, operating performance and a robust liquidity position, Fitch said. 

18. Hackensack Meridian Health has an “AA-” rating and stable outlook with Fitch. The Edison, N.J.-based system’s rating is supported by its strong presence in its large and demographically favorable market, Fitch said.  

19. Harris Health System has an “AA” rating and stable outlook with Fitch. The Houston-based system has a “very strong” revenue defensibility, primarily based on the district’s significant taxing margin that provides support for operations and debt service, Fitch said.

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

21. IU Health has an “AA” rating and stable outlook with Fitch. The Indianapolis-based system has a long track record of strong operating margins and an overall credit profile that is supported by a strong balance sheet, the rating agency said. 

22. Inspira Health has an “AA-” rating and stable outlook with Fitch. The Mullica Hill, N.J.-based system’s rating reflects its leading market position in a stable service area and a large medical staff supported by a growing residency program, Fitch said. 

23. Lucile Packard Children’s Hospital has an “AA-” rating and stable outlook with Fitch. The rating reflects the Palo Alto, Calif.-based hospital’s role as a nationally known, leading children’s hospital, Fitch said. It also benefits from resilient clinical volumes and a solid market position, as well as its relationship with Stanford University and Stanford Health Care. 

24. Kaiser Permanente has an “AA-” and stable outlook with Fitch. The Oakland, Calif.-based system’s rating is driven by a strong financial profile, which is maintained despite a challenging operating environment in fiscal year 2022. 

25. Mayo Clinic has an “Aa2” rating and stable outlook with Moody’s. The Rochester, Minn.-based system’s credit profile characterized by its excellent reputations for clinical services, research and education, Moody’s said.

26. McLaren Health Care has an “AA-” rating and stable outlook with Fitch. The Grand Blanc, Mich.-based system has a leading market position over a broad service area covering much of Michigan and a track-record of profitability despite sector-wide market challenges in recent years, Fitch said. 

27. MemorialCare has an “AA-” rating and stable outlook with Fitch. The rating reflects the Fountain Valley, Calif.-based system’s strong financial profile and excellent leverage metrics despite its weaker operating performance, Fitch said. 

28. Memorial Sloan-Kettering Cancer Center has an “AA” rating and stable outlook with Fitch. The rating reflects Fitch’s expectation that the New York City-based system’s national and international reputation as a premier cancer hospital will continue to support growth in its leading and increasing market share for its specialty services. 

29. Midland (Texas) Health has an “AA-” rating and stable outlook with Fitch. The rating reflects Midland’s exceptional market position and limited competition for acute-care services and growing outpatient services, Fitch said.  

30. Munson Healthcare has an “AA” rating and stable outlook with Fitch. The rating reflects the strength of the Traverse City, Mich.-based system’s market position and its leverage and liquidity profiles.  

31. North Mississippi Health Services has an “AA” rating and stable outlook with Fitch. The Tupelo-based system’s rating reflects its very strong cash position and strong market position, Fitch said. 

32. Novant Health has an “AA-” rating and stable outlook with Fitch. The Winston-Salem, N.C.-based system has a highly competitive market share in three separate North Carolina markets, Fitch said, including a leading position in Winston-Salem (46.8 percent) and second only to Atrium Health in the Charlotte area.  

33. NYC Health + Hospitals has an “AA-” rating with Fitch. The New York City system is the largest municipal health system in the country, serving more than 1 million New Yorkers annually in more than 70 patient locations across the city, including 11 hospitals, and employs more than 43,000 people. 

34. Orlando (Fla.) Health has an “AA-” and stable outlook with Fitch. The system’s upgrade from “A+” reflects the continued strength of the health system’s operating performance, growth in unrestricted liquidity and excellent market position in a demographically favorable market, Fitch said.  

35. The Queen’s Health System has an “AA” rating and stable outlook with Fitch. The Honolulu-based system’s rating reflects its leading state-wide market position, historically strong operating performance and diverse revenue streams, the rating agency said. 

36. Rush System for Health has an “AA-” and stable outlook with Fitch. The Chicago-based system has a strong financial profile despite ongoing labor issues and inflationary pressures, Fitch said. 

37. Saint Francis Healthcare System has an “AA” rating and stable outlook with Fitch. The Cape Girardeau, Mo.-based system enjoys robust operational performance and a strong local market share as well as manageable capital plans, Fitch said. 

38. Salem (Ore.) Health has an “AA-” rating and stable outlook with Fitch. The system has a “very strong” financial profile and a leading market share position, Fitch said. 

39. Stanford Health Care has an “AA” rating and stable outlook with Fitch. The Palo Alto, Calif.-based system’s rating is supported by its extensive clinical reach in the greater San Francisco and Central Valley regions and nationwide/worldwide destination position for extremely high-acuity services, Fitch said. 

40. SSM Health has an “AA-” rating and stable outlook with Fitch. The St. Louis-based system has a strong financial profile, multi-state presence and scale, with solid revenue diversity, Fitch said.  

41. St. Clair Health has an “AA-” rating and stable outlook with Fitch. The rating reflects the Pittsburgh-based system’s strong financial profile assessment, solid market position and historically strong operating performance, the rating agency said. 

42. UCHealth has an “AA” rating and stable outlook with Fitch. The Aurora, Colo.-based system’s margins are expected to remain robust, and the operating risk assessment remains strong, Fitch said.  

43. University of Kansas Health System has an “AA-” rating and stable outlook with S&P Global. The Kansas City-based system has a solid market presence, good financial profile and solid management team, though some balance sheet figures remain relatively weak to peers, the rating agency said. 

44. WellSpan Health has an “Aa3” rating and stable outlook with Moody’s. The York, Pa.-based system has a distinctly leading market position across several contiguous counties in central Pennsylvania, and management’s financial stewardship and savings initiatives will continue to support sound operating cash flow margins when compared to peers, Moody’s said.

45. Willis-Knighton Health System has an “AA-” rating and stable outlook with Fitch. The Shreveport, La.-based system has a “dominant inpatient market position” and is well positioned to manage operating pressures, Fitch said.

69 hospitals, health systems cutting jobs

Posted on by • Posted in Employee Layoffs, Health System, Hospital, Hospital Industry, Job Loss, Job Market, Labor Spend Management, Operating Expense Reduction, Operating Expenses, Operating Income, Operating Margin, Operating Metrics, Operating Performance, Operating Revenue • Leave a comment
https://www.beckershospitalreview.com/finance/17-hospitals-health-systems-cutting-jobs-february-2023.html?origin=RCME&utm_source=RCME&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

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

Below are workforce reduction efforts or job eliminations that were announced within the past year and/or take effect later in 2023. 

Editor’s Note: This webpage was updated June 30 and will continue to be updated. 

1. Coral Gables-based Baptist Health South Florida is offering its executives at the director level and above a “one-time opportunity” to apply for voluntary separation, according to a June 29 Miami Herald report. Decisions on  buyout applications will be made during the summer.

2. MultiCare Health System, a 12-hospital organization based in Tacoma, Wash., will lay off 229 employees, or about 1 percent of its 23,000 staff members, including about two dozen leaders, as part of cost-cutting efforts, the health system said June 29. The layoffs primarily affect support departments, such as marketing, IT and finance.

3. Greensburg, Pa.-based Independence Health System laid off 53 employees and has cut 226 positions — including resignations, retirements and elimination of vacant positions — since January, The Butler Eagle reported June 28. The 226 reductions began at the executive level, with 13 manager positions terminated in March. 

4. Billings (Mont.) Clinic will lay off workers as part of a restructuring plan to address financial and operational headwinds in today’s healthcare environment, the organization confirmed. The layoffs are expected to affect approximately 27 or fewer positions. 

5. Melbourne, Fla.-based Health First is eliminating some positions and leaving open ones vacant, Florida Today reported June 21. Seventeen jobs will be cut and 36 will be left unfilled, according to Paula Just, the health system’s chief experience officer. 

6. Pittsburgh-based Highmark Health laid off 118 employees on June 21, including two from  Allegheny Health Network, a spokesperson for the health system told Becker’s. The layoffs follow the health system’s cutbacks in March and April, according to the Pittsburgh Business Times. Highmark laid off 141 workers earlier this year.

7. Vibra Hospital of Western Massachusetts, a long-term-acute care hospital in Springfield, will lay off 87 employees by Aug. 15 ahead of the facility’s planned closure. About 30 patients will be relocated to Baystate Health’s Valley Springs Behavioral Health Hospital in Holyoke, Mass., which will open in August.

8. Cortez, Colo.-based Southwest Memorial Hospital laid off nine people to help ensure the hospital is staffed appropriately, and create financial stability for the future, a spokesperson confirmed to Becker’s. The spokesperson, Chuck Krupa, said the layoffs occurred June 14 and included administrative workers. No bedside care positions were affected. 

9. Henry Mayo Newhall Hospital in Valencia, Calif., is making “a little over 100” layoffs amid financial challenges, spokesperson Patrick Moody confirmed to Becker’s. Mr. Moody said the layoffs affect workers “in a wide range of hospital departments.” This includes some management-level employees. The hospital, which has about 1,800 employees total, is not providing specific numbers for specific job titles or departments.

10. Dartmouth Health is laying off 75 workers and eliminating 100 job vacancies. The layoffs came after the Lebanon, N.H.-based health system implemented a performance improvement plan in November. 

11. Seattle Children’s is eliminating 135 leader roles, citing financial challenges. The management restructuring and reduction affects 1.5 percent of employees across the organization.

12. White Rock (Texas) Medical Center laid off 30 workers across 28 departments. The layoffs include clinical and administrative roles. 

13. Jackson, Miss.-based St. Dominic Health Services is laying off 157 workers and ending behavioral health services. The reduction represents 5.5 percent of the hospital’s workforce.

14. Danville, Pa.-based Geisinger laid off 47 employees from its IT department. The reduction is part of a restructuring plan to offset high labor and supply costs.

15. Cascade Behavioral Health Hospital in Tukwila, Wash., is winding down operations and laying off 288 employees. The 137-bed psychiatric facility is slated to close by July 31.

16. Cambridge (Mass.) Health Alliance is laying off 69 employees, reducing the hours of 15 others and eliminating 170 open positions, according to The Boston Globe. The reductions are primarily in management, administrative and support areas, a health system spokesperson told Becker’s. 

17. Wenatchee, Wash.-based Confluence Health has eliminated its chief operating officer amid restructuring efforts and financial pressures, the health system confirmed to Becker’s May 16.

18. Conemaugh Memorial Medical Center, a Duke LifePoint hospital in Johnstown, Pa., has laid off less than 1 percent of its workforce, the hospital confirmed to Becker’s May 15.  

19. Community Health Network, a nonprofit health system based in Indianapolis, plans to cut an unspecified number of jobs as it restructures its workforce and makes organizational changes. The health system confirmed the job cuts in a statement shared with Becker’s on May 11. It did not say how many jobs would be cut or which positions would be affected. 

20. New Orleans-based Ochsner Health eliminated 770 positions, or about 2 percent of its workforce, on May 11. This is the largest layoff to date for the health system. 

21. Cedars-Sinai Medical Center eliminated the positions of 131 employees and cut about two dozen other jobs at related Cedars-Sinai facilities, a spokesperson confirmed via a statement shared with Becker’s May 7. The Los Angeles-based organization said reductions represent less than 1 percent of the workforce and apply to management and non-management roles primarily in non-patient care jobs.

22. Rochester (N.Y.) Regional Health is eliminating about 60 positions. A statement from RRH said the changes affect less than one-half percent of the system population, mostly in nonclinical and management positions.

23. Memorial Health System laid off fewer than 90 people, or less than 2 percent of its workforce.The Gulfport, Miss.-based health system said May 2 that most of the affected positions are nonclinical or management roles, and the majority do not involve direct patient care. 

24. Monument Health laid off at least 80 employees, or about 2 percent of its workforce. The Rapid City, S.D.-based system said positions are primarily corporate service roles and will not affect patient services. Unfilled corporate service positions were also eliminated. 

25. Habersham Medical Center in Demorest, Ga., laid off four executives. The layoffs are part of cost-cutting measures before the hospital joins Gainesville-based Northeast Georgia Health System in July, nowhaberbasham.com reported April 27. 

26. Scripps Health is eliminating 70 administrative roles, according to WARN documents filed by the San Diego-based health system in March. The layoffs take effect May 8 and affect corporate positions in San Diego and La Jolla, Calif.

27. Trinity Health Mid-Atlantic, part of Livonia, Mich.-based Trinity Health, eliminated fewer than 40 positions, a spokesperson confirmed to Becker’s April 24. The layoffs represent 0.5 percent of the health system’s approximately 7,000-person workforce.

28. PeaceHealth eliminated 251 caregiver roles across multiple locations. The Vancouver, Wash.-based health system said affected roles include 121 from Shared Services, which supports its 16,000 caregivers in Washington, Oregon and Alaska.

29. Toledo, Ohio-based ProMedica plans to lay off 26 skilled nursing support staff. The layoffs, effective in June, affect 20 employees who work remotely across the U.S, and six who work at the ProMedica Summit Center in Toledo, according to a Worker Adjustment and Retraining Notification filed April 18. Most affected positions support sales, marketing and administrative functions for the skilled nursing facilities, Promecia told Becker’s.

30. Northern Inyo Healthcare District, which operates a 25-bed critical access hospital in Bishop, Calif., anticipates eliminating about 15 positions, or less than 4 percent of its 460-member workforce, by April 21, a spokesperson confirmed to Becker’s. The layoffs include nonclinical roles within support and administration, according to a news release. No further details were provided about specific positions affected. 

31. West Reading, Pa.-based Tower Health is eliminating 100 full-time equivalent positions. The move will affect 45 individuals, according to an April 13 news release the health system shared with Becker’s. The other 55 positions are either recently vacated or involve individuals who plan to retire in the coming weeks and months.

32. Grand Forks, N.D.-based Altru Health is trimming its executive team as its new hospital project moves forward. The health system is trimming its executive team from nine to six and incentivizing 34 other employees to take early retirement.

33. Tacoma, Wash.-based Virginia Mason Franciscan Health laid off nearly 400 employees, most of whom are in non-patient-facing roles. The job cuts affected less than 2 percent of the health system’s 19,000-plus workforce.

34. Katherine Shaw Bethea Hospital in Dixon, Ill., will lay off 20 employees, citing financial headwinds affecting health organizations across the U.S. It will also leave other positions unfilled to reduce expenses amid rising labor and supply costs and reductions in payments by insurance plans. Affected employees largely work in administrative support areas and not direct patient care.

35. Danbury, Conn.-based Nuvance Health will close a 100-bed rehabilitation facility in Rhinebeck, N.Y., resulting in 102 layoffs. The layoffs are effective April 12, according to the Daily Freeman.

36. Charleston, S.C.-based MUSC Health University Medical Center laid off an unspecified number of employees from its Midlands hospitals in the Columbia, S.C. area. Division President Terry Gunn also resigned after the facilities missed budget expectations by $40 million in the first six months of the fiscal year, The Post and Courier reported March 30. 

37. Winston-Salem, N.C.-based Novant Health laid off about 50 workers, including C-level executives, the health system confirmed to Becker’s March 29. The layoffs affected Jesse Cureton, the health system’s executive vice president and chief consumer officer since 2013; Angela Yochem, its executive vice president and chief transformation and digital officer since 2020; and Paula Dean Kranz, vice president of innovation enablement and executive director of the Novant Health Innovation Labs. 

38. Penn Medicine Lancaster (Pa.) General Health eliminated fewer than 65 jobs, or less than 1 percent of its workforce of about 9,700, the health system confirmed to Becker’s March 30. The layoffs include support, administrative and executive roles, and COVID-19-related support staff, spokesperson John Lines said, according to lancasteronline.com. Mr. Lines did not provide a specific number of affected workers.

39. McLaren St. Luke’s Hospital in Maumee, Ohio, will lay off 743 workers, including 239 registered nurses, when it permanently closes this spring. Other affected roles include physical therapists, radiology technicians, respiratory therapists, pharmacists and pharmacy support staff, and nursing assistants. The hospital’s COO is also affected, and a spokesperson for McLaren Health Care told Becker’s other senior leadership roles are also affected.

40. Bellevue, Wash.-based Overlake Medical Center and Clinics laid off administrative staff, the health system confirmed to the Puget Sound Business Journal. The layoffs, which occurred earlier this year, included 30 workers across Overlake’s human resources, information technology and finance departments, a spokesperson said, according to the publication. This represents about 6 percent of the organization’s administrative workforce. Overlake’s website says it employs more than 3,000 people total.

41. Columbia-based University of Missouri Health Care is eliminating five hospital leadership positions across the organization, spokesperson Eric Maze confirmed to Becker’s March 20. Mr. Maze did not specify which roles are being eliminated saying that the organization won’t address individual personnel actions. According to MU Health Care, the move is a result of restructuring “to better support patients and the future healthcare needs of Missourians.”

42. Greensboro, N.C.-based Cone Health eliminated 68 senior-level jobs. The job eliminations occurred Feb. 21, Cone Health COO Mandy Eaton told The Alamance News. Of the 68 positions eliminated, 21 were filled. Affected employees were offered severance packages. 

43. The newly merged Greensburg, Pa.-based organization made up of Excela Health and Butler Health System eliminated 13 filled managerial jobs. The affected employees and positions are from across both sides of the new organization, Tom Chakurda, spokesperson for the Excela-Butler enterprise, confirmed to Becker’s. The positions were in various support functions unrelated to direct patient care.

44. Crozer Health, a four-hospital system based in Upland, Pa., is laying off roughly 215 employees amid financial challenges. The system announced the layoffs March 15 as part of its “operational restructuring plan” that “focuses on removing duplication in administrative oversight and discontinuing underutilized services.” Affected employees represent about 4 percent of the organization’s workforce.

45. Philadelphia-based Penn Medicine is eliminating administrative positions. The change is part of a reorganization plan to save the health system $40 million annually, the Philadelphia Business Journal reported March 13. Kevin Mahoney, CEO of the University of Pennsylvania Health System, told Penn Medicine’s 49,000 employees last week that changes include the elimination of a “small number of administrative positions which no longer align with our key objectives,” according to the publication. The memo did not indicate the exact number of positions that were eliminated.

46. Sovah Health, part of Brentwood, Tenn.-based Lifepoint Health, eliminated the COO positions at its Danville and Martinsville, Va., campuses. The responsibilities of both COO roles will now be spread across members of the existing administrative team. 

47. Valley Health, a six-hospital health system based in Winchester, Va., eliminated 31 administrative positions. The job cuts are part of the consolidation of the organization’s leadership team and administrative roles. 

48. Marshfield (Wis.) Clinic Health System said it would lay off 346 employees, representing less than 3 percent of its employee base.

49. St. Mark’s Medical Center in La Grange, Texas, is cutting nearly 50 percent of its staff and various services amid financial challenges. 

50. Roseville, Calif.-based Adventist Health plans to go from seven networks of care to five systemwide to reduce costs and strengthen operations. The reorganization will result in job cuts, including reducing administration by more than $100 million.

51. Arcata, Calif.-based Mad River Community Hospital is cutting 27 jobs as it suspends home health services.

52. Hutchinson (Kan.) Regional Medical Center laid off 85 employees, a move tied to challenges in today’s healthcare environment. 

53. Oklahoma City-based OU Health eliminated about 100 positions as part of an organizational redesign to complete the integration from its 2021 merger.

54. Memorial Sloan Kettering Cancer Center announced it would lay off to reduce costs amid widespread hospital financial challenges. The layoffs are spread across 14 sites in New York City, and equate to about 1.8 percent of Memorial Sloan’s 22,500 workforce.

55. St. Louis-based Ascension completed layoffs in Texas, the health system confirmed in January. A statement shared with Becker’s says the layoffs primarily affected nonclinical support roles. The health system declined to specify to Becker’s the number of employees or positions affected.

56. Lebanon, N.H.-based Dartmouth Health is freezing hiring and reviewing all vacant jobs at its flagship hospital and clinics in an effort to close a $120 million budget gap. 

57. Chillicothe, Ohio-based Adena Health System announced it would eliminate 69 positions — 1.6 percent of its workforce — and send 340 revenue cycle department employees to Ensemble Health Partners’ payroll in a move aimed to help the health system’s financial stability.

58. Ascension St. Vincent’s Riverside in Jacksonville, Fla., will end maternity care at the hospital, affecting 68 jobs, according to a Workforce Adjustment and Retraining Notification filed with the state Jan. 17. The move will affect 62 registered nurses as well as six other positions.

59. Visalia, Calif.-based Kaweah Health said it aimed to eliminate 94 positions as part of a new strategy to reduce labor costs. The job cuts come in addition to previously announced workforce reductions; the health system already eliminated 90 unfilled positions and lowered its workforce by 106 employees. 

60. Oklahoma City-based Integris Health said it would eliminate 200 jobs to curb expenses. The eliminations include 140 caregiver roles and 60 vacant jobs.

61. Toledo, Ohio-based ProMedica announced plans to lay off 262 employees, a move tied to its exit from a skilled-nursing facility joint venture late last year. The layoffs will take effect between March 10 and April 1. 

62. Employees at Las Vegas-based Desert Springs Hospital Medical Center were notified of layoffs coming to the facility, which will transition to a freestanding emergency department. There are 970 employees affected. Desert Springs is part of the Valley Health System, a system owned and operated by King of Prussia, Pa.-based Universal Health Services.

63. Philadelphia-based Jefferson Health plans to go from five divisions to three in an effort to flatten management and become more efficient. The reorganization will result in an unspecified number of job cuts, primarily among executives.

64. Pikeville (Ky.) Medical Center said it would lay off 112 employees as it outsources its environmental services department. The 112 layoffs were effective Jan. 1, 2023.

65. Southern Illinois Healthcare, a four-hospital system based in Carbondale, announced it would eliminate or restructure 76 jobs in management and leadership. The 76 positions fall under senior leadership, management and corporate services. Included in that figure are 33 vacant positions, which will not be filled. No positions in patient care are affected. 

66. Citing a need to further reduce overhead expenses and support additional investments in patient care and wages, Traverse City, Mich.-based Munson Health said it would eliminate 31 positions and leave another 20 jobs unfilled. All affected positions are in corporate services or management. The layoffs represent less than 1 percent of the health system’s workforce of nearly 8,000. 

67. West Reading, Pa.-based Tower Health on Nov. 16 laid off 52 corporate employees as the health system shrinks from six hospitals to four. The layoffs, which are expected to save $15 million a year, account for 13 percent of Tower Health’s corporate management staff.

68. Sioux Falls, S.D.-based Sanford Health announced layoffs affecting an undisclosed number of staff in October, a decision its CEO said was made “to streamline leadership structure and simplify operations” in certain areas. The layoffs primarily affect nonclinical areas.

69. St. Vincent Charity Medical Center in Cleveland closed its inpatient and emergency room care Nov. 11, four days before originally planned — and laid off 978 workers in doing so. After the transition, the Sisters of Charity Health System will offer outpatient behavioral health, urgent care and primary care.

National Hospital Flash Report: May 2023

Posted on by • Posted in Bad Debt Expense, Consumer Price Index (CPI), Federal Open Market Committee (FOMC), Health System, Hospital, Hospital Industry, Inflation, Labor Market, Medicaid, Medicaid Redeterminations, Nonoperating Income, Operating Expenses, Operating Income, Operating Margin, Operating Metrics, Operating Performance, Operating Revenue, Utilization Trends • Leave a comment
https://www.kaufmanhall.com/insights/research-report/national-hospital-flash-report-june-2023?utm_source=mkto&utm_campaign=nhfr-report&utm_medium=em&utm_term=june-nhfr-sub-230627&mkt_tok=NjU0LUNOWS0yMjQAAAGMnDGGjpYH9zyA2KwZhd3TO-fx75wKHW21j7eocz_NWrvPx1vAB1H4gnPUVObUbPrBnzQjK8jfwxhcLCnzPgvhYfq1E6bWI3Wtv6cp3Gv2sdZQ

Hospital finances showed signs of stabilizing in May amid slightly improving operating margins, declining expenses and notable increases in outpatient visits.

The median Kaufman Hall Year-To-Date Operating Margin Index reflecting actual margins was 0.3% in May.

The June issue of the National Hospital Flash Report covers these and other key performance metrics.

About the Data


The National Hospital Flash Report uses both actual and budget
data over the last three years, sampled from more than 900 hospitals
on a recurring monthly basis from Syntellis Performance Solutions.


The sample of hospitals for this report is representative of all hospitals in
the United States both geographically and by bed size. Additionally,
hospitals of all types are represented, from large academic to small
critical access. Advanced statistical techniques are used to standardize
data, identify and handle outliers, and ensure statistical soundness prior
to inclusion in the report.


While this report presents data in the aggregate, Syntellis Performance
Solutions also has real-time data down to individual department,
jobcode, paytype, and account levels, which can be customized into peer
groups for unparalleled comparisons to drive operational decisions and
performance improvement initiatives.

Key Takeaways

  1. Hospitals broke even in April.
    The median operating margin for hospitals was 0% in April, leaving most hospitals with little to no
    financial wiggle room.
  2. Volumes dropped while lengths of stay increased.
    Hospital volumes dropped across the board—including inpatient and outpatient. Emergency department
    volumes were the least affected.
  3. Effects of Medicaid disenrollment could be materializing.
    Hospitals experienced increases in bad debt and charity care in April. Combined with anemic patient
    volumes, experts note this data could illustrate the effects of the start of widespread disenrollment from
    Medicaid following the end of the COVID-19 public health emergency.
  4. Inflation continued to throttle hospital finances.
    Labor costs jumped in April and the costs of goods and services continued to be well above pre-pandemic
    levels. Though expenses generally fell in April, revenues declined at a faster rate.

National Non-Operating Results

Key Observations

At their May meeting, the Federal Open Market Committee (FOMC) raised the
benchmark borrowing rate another 25 basis points, setting the range to 5.00-5.25%
and marking the 10th consecutive hike in the cycle as well as a 16-year high

  • Fed officials acknowledged discussion of a potential pause in tightening while
    leaving wiggle room, saying “rates are going to come down” over a long period of
    time while also warning inflation “continues to run high”     and the Fed will be taking
    a “data-dependent approach”
  • The consumer price index (CPI) rose 0.4% in April, a 4.9% increase year-over-year,
    an annual pace of inflation below 5% for the first time in two years
  • The labor market continued to show resilience in April as U.S. nonfarm payrolls
    grew by 253,000 and unemployment fell back to a 53-year low of 3.4%
  • Strong inflation, a robust labor market, continued banking sector woes, and a debt
    ceiling standoff further complicates credit conditions and may challenge
    the Fed to stabilize financial markets
  • Equities in April, as measured by the S&P 500, were up 1.5% in April and
    8.6% YTD despite downbeat economic data, reoccurring banking sector fears,
    and mixed earnings

Is the Traditional Hospital Strategy Aging Out?

Posted on by • Posted in Board, Business Case, Business Model, Financial Distress, Financial Performance, Financial Reserves, Financial Stewardship, Financial Strength, Financial Viability, Financially Distressed, Health System, Hospital, Hospital Industry, Leadership, Leadership Culture, Leadership Intent, Leadership Legacy, Leadership Values, Leadership Vision, Leadership Will, Operating Margin, Operating Metrics, Operating Model, Operating Performance, Strategic Alignment, Strategic Imperative, Strategic Issue, Strategic Leadership, Strengths, Value, Value Proposition, Value-Based Healthcare • Leave a comment

https://www.kaufmanhall.com/insights/thoughts-ken-kaufman/traditional-hospital-strategy-aging-out

On October 1, 1908, Ford produced the first Model T automobile. More than 60 years later, this affordable, mass produced, gasoline-powered car was still the top-selling automobile of all time. The Model T was geared to the broadest possible market, produced with the most efficient methods, and used the most modern technology—core elements of Ford’s business strategy and corporate DNA.

On April 25, 2018, almost 100 years later, Ford announced that it would stop making all U.S. internal-combustion sedans except the Mustang.

The world had changed. The Taurus, Fusion, and Fiesta were hardly exciting the imaginations of car-buyers. Ford no longer produced its U.S. cars efficiently enough to return a suitable profit. And the internal combustion technology was far from modern, with electronic vehicles widely seen as the future of automobiles.

Ford’s core strategy, and many of its accompanying products, had aged out. But not all was doom and gloom; Ford was doing big and profitable business in its line of pickups, SUVs, and -utility vehicles, led by the popular F-150.

It’s hard to imagine the level of strategic soul-searching and cultural angst that went into making the decision to stop producing the cars that had been the basis of Ford’s history. Yet, change was necessary for survival. At the time, Ford’s then-CEO Jim Hackett said, “We’re going to feed the healthy parts of our business and deal decisively with the areas that destroy value.”

So Ford took several bold steps designed to update—and in many ways upend—its strategy. The company got rid of large chunks of the portfolio that would not be relevant going forward, particularly internal combustion sedans. Ford also reorganized the company into separate divisions for electric and internal combustion vehicles. And Ford pivoted to the future by electrifying its fleet.

Ford did not fully abandon its existing strategies. Rather, it took what was relevant and successful, and added that to the future-focused pivot, placing the F-150 as the lead vehicle in its new electric fleet.

This need for strategic change happens to all large organizations. All organizations, including America’s hospitals and health systems, need to confront the fact that no strategic plan lasts forever.

Over the past 25-30 years, America’s hospitals and health systems based their strategies on the provision of a high-quality clinical care, largely in inpatient settings. Over time, physicians and clinics were brought into the fold to strengthen referral channels, but the strategic focus remained on driving volume to higher-acuity services.

More recently, the longstanding traditional patient-physician-referral relationship began to change. A smarter, internet-savvy, and self-interested patient population was looking for different aspects of service in different situations. In some cases, patients’ priority was convenience. In other cases, their priority was affordability. In other cases, patients began going to great lengths to find the best doctors for high-end care regardless of geographic location. In other cases, patients wanted care as close as their phone.

Around the country, hospitals and health systems have seen these environmental changes and adjusted their strategies, but for the most part only incrementally. The strategic focus remains centered on clinical quality delivered on campus, while convenience, access, value, affordability, efficiency, and many virtual innovations remain on the strategic periphery.

Health system leaders need to ask themselves whether their long-time, traditional strategy is beginning to age out. And if so, what is the “Ford strategy” for America’s health systems?

The questions asked and answered by Ford in the past five years are highly relevant to health system strategic planning at a time of changing demand, economic and clinical uncertainty, and rapid innovation. For example, as you view your organization in its entirety, what must be preserved from the existing structure and operations, and what operations, costs, and strategies must leave? And which competencies and capabilities must be woven into a going-forward structure?

America’s hospitals and health systems have an extremely long history—in some cases, longer than Ford’s. With that history comes a natural tendency to stick with deeply entrenched strategies. Now is the time for health systems to ask themselves, what is our Ford F150? And how do we “electrify” our strategic plan going forward?

America’s Hospitals Need a Makeover

Posted on by • Posted in Financial Distress, Financial Instability, Financial Performance, Financial Stewardship, Financial Strength, Financial Viability, Financially Distressed, Health System, Hospital, Hospital Industry, Leadership, Leadership Implementation, Leadership Vision, Operating Margin, Operating Metrics, Operating Model, Operating Performance, Restructure, Strategic Change, Strategic Imperative, Strategic Leadership, Transformation, Transformation Strategy, Turnaround, Turnaround Plan, Value Proposition • Leave a comment
https://www.kaufmanhall.com/insights/thoughts-ken-kaufman/americas-hospitals-need-makeover?utm_source=mkto&utm_campaign=ken-weekly-blog&utm_medium=em&utm_term=230614&mkt_tok=NjU0LUNOWS0yMjQAAAGMWS9ZAaPCcQa93WPgO_WoUyj-E-eYX9hWxy7LscI1NCpx8dTV71jKu61_wuIefSJE83x84WPLHZdDDUbWi-xRaBc8Fk6dIFOnN4lJoQ-bPSv1

A couple of months ago, I got a call from a CEO of a regional health system—a long-time client and one of the smartest and most committed executives I know. This health system lost tens of millions of dollars in fiscal year 2022 and the CEO told me that he had come to the conclusion that he could not solve a problem of this magnitude with the usual and traditional solutions. Pushing the pre-Covid managerial buttons was just not getting the job done.

This organization is fiercely independent. It has been very successful in almost every respect for many years. It has had an effective and stable board and management team over the past 30 to 40 years.

But when the CEO looked at the current situation—economic, social, financial, operational, clinical—he saw that everything has changed and he knew that his healthcare organization needed to change as well. The system would not be able to return to profitability just by doing the same things it would have done five years or 10 years ago. Instead of looking at a small number of factors and making incremental improvements, he wanted to look across the total enterprise all at once. And to look at all aspects of the enterprise with an eye toward organizational renovation.

I said, “So, you want a makeover.”

The CEO is right. In an environment unlike anything any of us have experienced, and in an industry of complex interdependencies, the only way to get back to financial equilibrium is to take a comprehensive, holistic view of our organizations and environments, and to be open to an outcome in which we do things very differently.

In other words, a makeover.

Consider just a few areas that the hospital makeover could and should address:

There’s the REVENUE SIDE: Getting paid for what you are doing and the severity of the patient you are treating—which requires a focus on clinical documentation improvement and core revenue cycle delivery—and looking for any material revenue diversification opportunities.

There is the relationship with payers: Involving a mix of growth, disruption, and optimization strategies to increase payments, grow share of wallet, or develop new revenue streams.

There’s the EXPENSE SIDE: Optimizing workforce performance, focusing on care management and patient throughput, rethinking the shared services infrastructure, and realizing opportunities for savings in administrative services, purchased services, and the supply chain. While these have been historic areas of focus, organizations must move from an episodic to a constant, ongoing approach.

There’s the BALANCE SHEET: Establishing a parallel balance sheet strategy that will create the bridge across the operational makeover by reconfiguring invested assets and capital structure, repositioning the real estate portfolio, and optimizing liquidity management and treasury operations.

There is NETWORK REDESIGN: Ensuring that the services offered across the network are delivered efficiently and that each market and asset is optimized; reducing redundancy, increasing quality, and improving financial performance.

There is a whole concept around PORTFOLIO OPTIMIZATION: Developing a deep understanding of how the various components of your business perform, and how to optimize, scale back, or partner to drive further value and operational performance.

Incrementalism is a long-held business approach in healthcare, and for good reason. Any prominent change has the potential to affect the health of communities and those changes must be considered carefully to ensure that any outcome of those changes is a positive one. Any ill-considered action could have unintended consequences for any of a hospital’s many constituencies.

But today, incrementalism is both unrealistic and insufficient.

Just for starters, healthcare executive teams must recognize that back-office expenses are having a significant and negative impact on the ability of hospitals to make a sufficient operating margin. And also, healthcare executive teams must further realize that the old concept of “all things to all people” is literally bringing parts of the hospital industry toward bankruptcy.

As I described in a previous blog post, healthcare comprises some of the most wicked problems in our society—problems that are complex, that have no clear solution, and for which a solution intended to fix one aspect of a problem may well make other aspects worse.

The very nature of wicked problems argues for the kind of comprehensive approach that the CEO of this organization is taking—not tackling one issue at a time in linear fashion but making a sophisticated assessment of multiple solutions and studying their potential interdependencies, interactions, and intertwined effects.

My colleague Eric Jordahl has noted that “reverting to a 2019 world is not going to happen, which means that restructuring is the only option. . . . Where we are is not sustainable and waiting for a reversion is a rapidly decaying option.”

The very nature of the socioeconomic environment makes doing nothing or taking an incremental approach untenable. It is clearly beyond time for the hospital industry makeover.

Reviewing post-pandemic changes to hospital volumes 

Posted on by • Posted in Health System, Hospital, Hospital Industry, Operating Margin, Post Pandemic Changes, Utilization Trends • Leave a comment

https://mailchi.mp/3ed7bdd7f54b/the-weekly-gist-june-2-2023?e=d1e747d2d8

In the graphic above, we use the most recent data from software and analytics firm Strata Decision Technology to compare 2023 year-to-date (YTD) hospital volumes by admission type to both 2019 and 2022 volumes. 

Compared to 2019, outpatient volumes in 2023 have increased by 14 percent, while inpatient, observation, and emergency (ED) admissions are all down. However, compared to 2022, the reverse trend is true, with inpatient, observation, and ED volumes up from last year while outpatient volumes have dropped slightly. 

This suggests that the net increase in outpatient volume and net loss in inpatient and ED volume over the past few years appears to be locked in. While the COVID-accelerated outpatient shift is here to stay, hospitals can take solace in the recent uptick in inpatient, observation, and ED volumes, which helps those still struggling to return to positive operating margins.

Importantly, there is significant regional variability among these volume data, suggesting that health system recovery will not be uniform.

Minnesota passes path to public option

Posted on by • Posted in Affordability, Center for Medicare and Medicaid Services (CMS), Health Insurance Coverage Adequacy, Health Policy, Health System, Hospital, Hospital Industry, Medicaid Section 1115 Waiver, Medicare Waiver, Operating Margin, Public Option • Leave a comment

https://mailchi.mp/3ed7bdd7f54b/the-weekly-gist-june-2-2023?e=d1e747d2d8

Last week the Minnesota legislature passed a bill to initiate the creation of a public option health insurance plan available to state residents of all incomes. The bill funds an actuarial analysis of the policy and requires the state to apply for a Centers for Medicare and Medicaid Services (CMS) waiver to begin implementation by 2027. The public option plan will build upon MinnesotaCare, a state health plan currently covering residents with incomes below 200 percent of the federal poverty line. 

The Gist: Minnesota joins Washington, Colorado, and Nevada as the fourth state to authorize a public option health plan. But unlike these other three states, whose public option programs rely on private payers to manage risk and administration with tighter price controls, Minnesota intends to create a “true” public option in which the government competes directly with private payers. 

Analysis funded by a hospital and insurance trade group found that a public option could reduce Minnesota hospital revenues by more than $2B over 10 years, while only lowering the uninsured rate by half a percentage point.

Though Minnesota lawmakers were more concerned with lowering healthcare spending and improving health insurance affordability for state residents, the success of the program will depend in part on how it negotiates with providers, who justifiably fear a worsening payer mix that further threatens margins. 

60 hospitals, health systems cutting jobs

Posted on by • Posted in Employee Layoffs, Health System, Hospital, Hospital Industry, Job Loss, Operating Expense Reduction, Operating Expenses, Operating Income, Operating Margin, Operating Metrics, Operating Performance, Operating Revenue • Leave a comment
https://www.beckershospitalreview.com/finance/17-hospitals-health-systems-cutting-jobs-february-2023.html?origin=BHRSUN&utm_source=BHRSUN&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

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

Below are workforce reduction efforts or job eliminations that were announced within the past 10 months and/or take effect later this year. 

1. Dartmouth Health is laying off 75 workers and eliminating 100 job vacancies. The layoffs came after the Lebanon, N.H.-based health system implemented a performance improvement plan in November. 

2. Seattle Children’s is eliminating 135 leader roles, citing financial challenges. The management restructuring and reduction affects 1.5 percent of employees across the organization.

3. White Rock (Texas) Medical Center laid off 30 workers across 28 departments. The layoffs include clinical and administrative roles. 

4. Jackson, Miss.-based St. Dominic Health Services is laying off 157 workers and ending behavioral health services. The reduction represents 5.5 percent of the hospital’s workforce.

5. Danville, Pa.-based Geisinger laid off 47 employees from its IT department. The reduction is part of a restructuring plan to offset high labor and supply costs.

6. Cascade Behavioral Health Hospital in Tukwila, Wash., is winding down operations and laying off 288 employees. The 137-bed psychiatric facility is slated to close by July 31.

7. Cambridge (Mass.) Health Alliance is laying off 69 employees, reducing the hours of 15 others and eliminating 170 open positions, according to The Boston Globe. The reductions are primarily in management, administrative and support areas, a health system spokesperson told Becker’s. 

8. Wenatchee, Wash.-based Confluence Health has eliminated its chief operating officer amid restructuring efforts and financial pressures, the health system confirmed to Becker’s May 16.

9. Conemaugh Memorial Medical Center, a Duke LifePoint hospital in Johnstown, Pa., has laid off less than 1 percent of its workforce, the hospital confirmed to Becker’s May 15.  

10. Community Health Network, a nonprofit health system based in Indianapolis, plans to cut an unspecified number of jobs as it restructures its workforce and makes organizational changes. The health system confirmed the job cuts in a statement shared with Becker’s on May 11. It did not say how many jobs would be cut or which positions would be affected. 

11. New Orleans-based Ochsner Health eliminated 770 positions, or about 2 percent of its workforce, on May 11. This is the largest layoff to date for the health system. 

12. Cedars-Sinai Medical Center eliminated the positions of 131 employees and cut about two dozen other jobs at related Cedars-Sinai facilities, a spokesperson confirmed via a statement shared with Becker’s May 7. The Los Angeles-based organization said reductions represent less than 1 percent of the workforce and apply to management and non-management roles primarily in non-patient care jobs.

13. Rochester (N.Y.) Regional Health is eliminating about 60 positions. A statement from RRH said the changes affect less than one-half percent of the system population, mostly in nonclinical and management positions.

14. Memorial Health System laid off fewer than 90 people, or less than 2 percent of its workforce.The Gulfport, Miss.-based health system said May 2 that most of the affected positions are nonclinical or management roles, and the majority do not involve direct patient care. 

15. Monument Health laid off at least 80 employees, or about 2 percent of its workforce. The Rapid City, S.D.-based system said positions are primarily corporate service roles and will not affect patient services. Unfilled corporate service positions were also eliminated. 

16. Habersham Medical Center in Demorest, Ga., laid off four executives. The layoffs are part of cost-cutting measures before the hospital joins Gainesville-based Northeast Georgia Health System in July, nowhaberbasham.com reported April 27. 

17. Scripps Health is eliminating 70 administrative roles, according to WARN documents filed by the San Diego-based health system in March. The layoffs take effect May 8 and affect corporate positions in San Diego and La Jolla, Calif.

18. Trinity Health Mid-Atlantic, part of Livonia, Mich.-based Trinity Health, eliminated fewer than 40 positions, a spokesperson confirmed to Becker’s April 24. The layoffs represent 0.5 percent of the health system’s approximately 7,000-person workforce.

19. PeaceHealth eliminated 251 caregiver roles across multiple locations. The Vancouver, Wash.-based health system said affected roles include 121 from Shared Services, which supports its 16,000 caregivers in Washington, Oregon and Alaska.

20. Toledo, Ohio-based ProMedica plans to lay off 26 skilled nursing support staff. The layoffs, effective in June, affect 20 employees who work remotely across the U.S, and six who work at the ProMedica Summit Center in Toledo, according to a Worker Adjustment and Retraining Notification filed April 18. Most affected positions support sales, marketing and administrative functions for the skilled nursing facilities, Promecia told Becker’s.

21. Northern Inyo Healthcare District, which operates a 25-bed critical access hospital in Bishop, Calif., anticipates eliminating about 15 positions, or less than 4 percent of its 460-member workforce, by April 21, a spokesperson confirmed to Becker’s. The layoffs include nonclinical roles within support and administration, according to a news release. No further details were provided about specific positions affected. 

22. West Reading, Pa.-based Tower Health is eliminating 100 full-time equivalent positions. The move will affect 45 individuals, according to an April 13 news release the health system shared with Becker’s. The other 55 positions are either recently vacated or involve individuals who plan to retire in the coming weeks and months.

23. Grand Forks, N.D.-based Altru Health is trimming its executive team as its new hospital project moves forward. The health system is trimming its executive team from nine to six and incentivizing 34 other employees to take early retirement.

24. Tacoma, Wash.-based Virginia Mason Franciscan Health laid off nearly 400 employees, most of whom are in non-patient-facing roles. The job cuts affected less than 2 percent of the health system’s 19,000-plus workforce.

25. Katherine Shaw Bethea Hospital in Dixon, Ill., will lay off 20 employees, citing financial headwinds affecting health organizations across the U.S. It will also leave other positions unfilled to reduce expenses amid rising labor and supply costs and reductions in payments by insurance plans. Affected employees largely work in administrative support areas and not direct patient care.

26. Danbury, Conn.-based Nuvance Health will close a 100-bed rehabilitation facility in Rhinebeck, N.Y., resulting in 102 layoffs. The layoffs are effective April 12, according to the Daily Freeman.

27. Charleston, S.C.-based MUSC Health University Medical Center laid off an unspecified number of employees from its Midlands hospitals in the Columbia, S.C. area. Division President Terry Gunn also resigned after the facilities missed budget expectations by $40 million in the first six months of the fiscal year, The Post and Courier reported March 30. 

28. Winston-Salem, N.C.-based Novant Health laid off about 50 workers, including C-level executives, the health system confirmed to Becker’s March 29. The layoffs affected Jesse Cureton, the health system’s executive vice president and chief consumer officer since 2013; Angela Yochem, its executive vice president and chief transformation and digital officer since 2020; and Paula Dean Kranz, vice president of innovation enablement and executive director of the Novant Health Innovation Labs. 

29. Penn Medicine Lancaster (Pa.) General Health eliminated fewer than 65 jobs, or less than 1 percent of its workforce of about 9,700, the health system confirmed to Becker’s March 30. The layoffs include support, administrative and executive roles, and COVID-19-related support staff, spokesperson John Lines said, according to lancasteronline.com. Mr. Lines did not provide a specific number of affected workers.

30. McLaren St. Luke’s Hospital in Maumee, Ohio, will lay off 743 workers, including 239 registered nurses, when it permanently closes this spring. Other affected roles include physical therapists, radiology technicians, respiratory therapists, pharmacists and pharmacy support staff, and nursing assistants. The hospital’s COO is also affected, and a spokesperson for McLaren Health Care told Becker’s other senior leadership roles are also affected.

31. Bellevue, Wash.-based Overlake Medical Center and Clinics laid off administrative staff, the health system confirmed to the Puget Sound Business Journal. The layoffs, which occurred earlier this year, included 30 workers across Overlake’s human resources, information technology and finance departments, a spokesperson said, according to the publication. This represents about 6 percent of the organization’s administrative workforce. Overlake’s website says it employs more than 3,000 people total.

32. Columbia-based University of Missouri Health Care is eliminating five hospital leadership positions across the organization, spokesperson Eric Maze confirmed to Becker’s March 20. Mr. Maze did not specify which roles are being eliminated saying that the organization won’t address individual personnel actions. According to MU Health Care, the move is a result of restructuring “to better support patients and the future healthcare needs of Missourians.”

33. Greensboro, N.C.-based Cone Health eliminated 68 senior-level jobs. The job eliminations occurred Feb. 21, Cone Health COO Mandy Eaton told The Alamance News. Of the 68 positions eliminated, 21 were filled. Affected employees were offered severance packages. 

34. The newly merged Greensburg, Pa.-based organization made up of Excela Health and Butler Health System eliminated 13 filled managerial jobs. The affected employees and positions are from across both sides of the new organization, Tom Chakurda, spokesperson for the Excela-Butler enterprise, confirmed to Becker’s. The positions were in various support functions unrelated to direct patient care.

35. Crozer Health, a four-hospital system based in Upland, Pa., is laying off roughly 215 employees amid financial challenges. The system announced the layoffs March 15 as part of its “operational restructuring plan” that “focuses on removing duplication in administrative oversight and discontinuing underutilized services.” Affected employees represent about 4 percent of the organization’s workforce.

36. Philadelphia-based Penn Medicine is eliminating administrative positions. The change is part of a reorganization plan to save the health system $40 million annually, the Philadelphia Business Journal reported March 13. Kevin Mahoney, CEO of the University of Pennsylvania Health System, told Penn Medicine’s 49,000 employees last week that changes include the elimination of a “small number of administrative positions which no longer align with our key objectives,” according to the publication. The memo did not indicate the exact number of positions that were eliminated.

37. Sovah Health, part of Brentwood, Tenn.-based Lifepoint Health, eliminated the COO positions at its Danville and Martinsville, Va., campuses. The responsibilities of both COO roles will now be spread across members of the existing administrative team. 

38. Valley Health, a six-hospital health system based in Winchester, Va., eliminated 31 administrative positions. The job cuts are part of the consolidation of the organization’s leadership team and administrative roles. 

39. Marshfield (Wis.) Clinic Health System said it would lay off 346 employees, representing less than 3 percent of its employee base.

40. St. Mark’s Medical Center in La Grange, Texas, is cutting nearly 50 percent of its staff and various services amid financial challenges. 

41. Roseville, Calif.-based Adventist Health plans to go from seven networks of care to five systemwide to reduce costs and strengthen operations. The reorganization will result in job cuts, including reducing administration by more than $100 million.

42. Arcata, Calif.-based Mad River Community Hospital is cutting 27 jobs as it suspends home health services.

43. Hutchinson (Kan.) Regional Medical Center laid off 85 employees, a move tied to challenges in today’s healthcare environment. 

44. Oklahoma City-based OU Health eliminated about 100 positions as part of an organizational redesign to complete the integration from its 2021 merger.

45. Memorial Sloan Kettering Cancer Center announced it would lay off to reduce costs amid widespread hospital financial challenges. The layoffs are spread across 14 sites in New York City, and equate to about 1.8 percent of Memorial Sloan’s 22,500 workforce.

46. St. Louis-based Ascension completed layoffs in Texas, the health system confirmed in January. A statement shared with Becker’s says the layoffs primarily affected nonclinical support roles. The health system declined to specify to Becker’s the number of employees or positions affected.

47. Lebanon, N.H.-based Dartmouth Health is freezing hiring and reviewing all vacant jobs at its flagship hospital and clinics in an effort to close a $120 million budget gap. 

48. Chillicothe, Ohio-based Adena Health System announced it would eliminate 69 positions — 1.6 percent of its workforce — and send 340 revenue cycle department employees to Ensemble Health Partners’ payroll in a move aimed to help the health system’s financial stability.

49. Ascension St. Vincent’s Riverside in Jacksonville, Fla., will end maternity care at the hospital, affecting 68 jobs, according to a Workforce Adjustment and Retraining Notification filed with the state Jan. 17. The move will affect 62 registered nurses as well as six other positions.

50. Visalia, Calif.-based Kaweah Health said it aimed to eliminate 94 positions as part of a new strategy to reduce labor costs. The job cuts come in addition to previously announced workforce reductions; the health system already eliminated 90 unfilled positions and lowered its workforce by 106 employees. 

51. Oklahoma City-based Integris Health said it would eliminate 200 jobs to curb expenses. The eliminations include 140 caregiver roles and 60 vacant jobs.

52. Toledo, Ohio-based ProMedica announced plans to lay off 262 employees, a move tied to its exit from a skilled-nursing facility joint venture late last year. The layoffs will take effect between March 10 and April 1. 

53. Employees at Las Vegas-based Desert Springs Hospital Medical Center were notified of layoffs coming to the facility, which will transition to a freestanding emergency department. There are 970 employees affected. Desert Springs is part of the Valley Health System, a system owned and operated by King of Prussia, Pa.-based Universal Health Services.

54. Philadelphia-based Jefferson Health plans to go from five divisions to three in an effort to flatten management and become more efficient. The reorganization will result in an unspecified number of job cuts, primarily among executives.

55. Pikeville (Ky.) Medical Center said it would lay off 112 employees as it outsources its environmental services department. The 112 layoffs were effective Jan. 1, 2023.

56. Southern Illinois Healthcare, a four-hospital system based in Carbondale, announced it would eliminate or restructure 76 jobs in management and leadership. The 76 positions fall under senior leadership, management and corporate services. Included in that figure are 33 vacant positions, which will not be filled. No positions in patient care are affected. 

57. Citing a need to further reduce overhead expenses and support additional investments in patient care and wages, Traverse City, Mich.-based Munson Health said it would eliminate 31 positions and leave another 20 jobs unfilled. All affected positions are in corporate services or management. The layoffs represent less than 1 percent of the health system’s workforce of nearly 8,000. 

58. West Reading, Pa.-based Tower Health on Nov. 16 laid off 52 corporate employees as the health system shrinks from six hospitals to four. The layoffs, which are expected to save $15 million a year, account for 13 percent of Tower Health’s corporate management staff.

59. Sioux Falls, S.D.-based Sanford Health announced layoffs affecting an undisclosed number of staff in October, a decision its CEO said was made “to streamline leadership structure and simplify operations” in certain areas. The layoffs primarily affect nonclinical areas.

60. St. Vincent Charity Medical Center in Cleveland closed its inpatient and emergency room care Nov. 11, four days before originally planned — and laid off 978 workers in doing so. After the transition, the Sisters of Charity Health System will offer outpatient behavioral health, urgent care and primary care.

29 health systems ranked by operating margins

Posted on by • Posted in Financial Performance, Financial Reserves, Financial Stewardship, Financial Strength, Financial Viability, Health System, Hospital, Hospital Industry, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue • Leave a comment
https://www.beckershospitalreview.com/finance/29-health-systems-ranked-by-operating-margins.html?utm_medium=email&utm_content=newsletter

The median year-to-date operating margin index for hospitals improved slightly in April to 0 percent. While recent reports show signs of improving margins, they remain far below historical norms, and inflation and workforce expenses continue to challenge hospitals’ bottom lines.

“Hospital and health system leaders must figure out how to navigate the new financial reality and begin to take action,” Erik Swanson, senior vice president of data and analytics with Kaufman Hall, said in a May 31 report. “In the face of operating margins that may never fully recover and inflated expenses, developing and executing a strategic path forward to a future that is financially sustainable is crucial.”

Here are 29 health systems ranked by their operating margins in the first quarter: 

1. Tenet Healthcare (Dallas)

Revenue: $5.02 billion
Expenses: $4.48 billion
Operating income/loss: $603 million
Operating margin: 12 percent

2. HCA Healthcare (Nashville, Tenn.)

Revenue: $15.59 billion
Expenses: $13.67 billion
Operating income/loss: $1.54 billion
Operating margin: 9.9 percent

3. Community Health Systems (Franklin, Tenn.)

Revenue: $3.108 billion
Expenses: $3.111 billion
Operating income/loss: $210 million
Operating margin: 6.7 percent

4. BJC HealthCare (St. Louis)

Revenue: $1.72 billion
Expenses: $1.67 billion
Operating income/loss: $59.5 million 
Operating margin: 3.5 percent

5. Banner Health (Phoenix)

Revenue: $3.51 billion
Expenses: $3.38 billion
Operating income/loss: $128 million
Operating margin: 3.6 percent

6. Mayo Clinic (Rochester, Minn.)

Revenue: $4.27 billion
Expenses: $4.12 billion
Operating income/loss: $149 million
Operating margin: 3.5 percent

7. Intermountain Health (Salt Lake City)

Revenue: $3.99 billion
Expenses: $3.70 billion
Operating income/loss: $104 million
Operating margin: 2.6 percent

8. Sutter Health (Sacramento, Calif.)

Revenue: $3.82 billion 
Expenses: $3.74 billion
Operating income/loss: $88 million 
Operating margin: 2.3 percent

9. IU Health (Indianapolis)

Revenue: $2.08 billion
Expenses: $2.04 billion
Operating income/loss: $45.1 million
Operating margin: 2.1 percent

10. Trinity Health (Livona, Mich.) 

*Data is for nine-month period 
Revenue: $15.95 billion
Expenses: $16.21 billion
Operating income/loss: ($283.5 million) 
Operating margin: 1.8 percent

11. Montefiore (New York City) 

Revenue: $1.91 billion
Expenses: $1.88 billion
Operating income/loss: $32 million
Operating margin: 1.7 percent

12. UPMC (Pittsburgh)

Revenue: $6.9 billion
Expenses: $6.8 billion
Operating income/loss: $100.4 million
Operating margin: 1.5 percent

13. ThedaCare (Appleton, Wis.)

Revenue: $306.4 million
Expenses: $302.8 million
Operating income/loss: $3.6 million
Operating margin: 1.2 percent

14. Cleveland Clinic

Revenue: $3.51 billion
Expenses: $3.28 billion
Operating income/loss: $32.3 million
Operating margin: 0.9 percent

15. Kaiser Permanente (Oakland, Calif.)

Revenue: $25.2 billion
Expenses: $25 billion
Operating income/loss: $233 million
Operating margin: 0.9 percent

16. Advocate Health (Charlotte, N.C.)

Revenue: $7.54 billion
Expenses: $7.53 billion
Operating income/loss: $10.4 million
Operating margin: 0.1 percent

17. Universal Health Services (King of Prussia, Pa.)

Revenue: $3.47 billion
Expenses: $3.19 billion
Operating income/loss: $278,700
Operating margin: 0 percent

18. MedStar Health (Columbia, Md.)

Revenue: $1.928 billion
Expenses: $1.927 billion
Operating income/loss: $400,000 
Operating margin: 0 percent

19. Geisinger (Danville, Pa.)

Revenue: $1.84 billion
Expenses: $1.88 billion
Operating income/loss: ($36,068)
Operating margin: 0 percent

20. Mass General Brigham

Revenue: $4.5 billion
Expenses: $4.5 billion
Operating income/loss: ($6 million)
Operating margin: (0.1 percent)

21. Novant Health (Winston-Salem, N.C.) 

Revenue: $1.939 billion
Expenses: $1.954 billion
Operating income/loss: ($15.18 million) 
Operating margin: (0.8 percent)

22. Scripps Health

Revenue: $1.01 billion
Expenses: $1.03 billion
Operating income/loss: ($22.2 million) 
Operating margin: (2.2 percent)

23. UnityPoint Health

Revenue: $1.09 billion
Expenses: $1.12 billion
Operating income/loss: ($29.03 million)
Operating margin: (2.7 percent)

24. SSM Health (St. Louis)

Revenue: $2.46 billion 
Expenses: $2.53 billion
Operating income/loss: ($68.4 million)
Operating margin: (2.8 percent)

25. Marshfield (Wis.) Clinic

Revenue: $779.7 million
Expenses: $812.3 million
Operating income/loss: (32.6 million)
Operating margin: (4.2 percent)

26. Providence (Renton, Wash.) 

Revenue: $6.8 billion
Expenses: $7.145 billion
Operating income/loss: ($345 million)
Operating margin: (5.1 percent)

27. MultiCare (Tacoma, Wash.) 

Revenue: $1.16 billion
Expenses: $1.22 billion
Operating income/loss: ($59.9 million)
Operating margin: (5.2 percent)

28. CommonSpirit (Chicago) 

Revenue: $8.3 billion
Expenses: $8.9 billion
Operating income/loss: ($658 million) 
Operating margin: (8 percent)

29. Ascension (St. Louis)

Revenue: $6.94 billion 
Expenses: $7.62 billion 
Operating income/loss: ($1.36 billion)
Operating margin: (19.6 percent)

Trinity Health sees improving margins but still operating at a loss despite gains in Q3

Posted on by • Posted in Financial Performance, Financial Reserves, Financial Stewardship, Financial Strength, Financial Viability, Health System, Hospital, Hospital Industry, Net Income, Nonoperating Income, Operating Expense Reduction, Operating Expenses, Operating Income, Operating Margin, Operating Metrics, Operating Performance, Operating Revenue • Leave a comment

https://www.fiercehealthcare.com/providers/trinity-health-still-operating-loss-despite-gains-q3-improving-margins

Despite a reasonably solid third quarter, Trinity Health is still operating at a loss in its 2023 fiscal year, according to a new filing.

The health system’s fiscal year began July 1, 2022, with the latest figures covering the first nine months. Its latest operating loss shrank to $263.1 million from the prior six months’ $298 million loss. Fiscal year 2023 operating revenue currently stands at $15.9 billion, up from the same period last year.

The nonprofit health system attributed its operating revenue growth to several acquisitions (MercyOne, North Ottawa Community Health System, Genesis Health System), which collectively added $1 billion of operating revenue. Net income for the last nine months was $856.3 million, compared to $43 million in the same period the prior year.

Though inpatient volumes are stabilizing to “a new normal,” management wrote in the latest filing, most of Trinity’s revenue comes from outpatient and other non-patient revenue. Operating expenses rose $1.1 billion compared to the same period in fiscal year 2022, mostly driven by the acquisitions. 

Nonoperating income was $1.2 billion during the first nine months of fiscal year 2023, up from $264.6 million in the first six months. This hike was driven partly by a $629.3 million increase in investment returns.

The health system’s operating margin was 1.6%, per the latest filing, compared to 0.1% during the same period a year ago. Margins were affected by expenses outpacing revenue, primarily driven by premium labor rates and inflation impacting supplies as well as a $137 million reduction in CARES Act grant funding. 

Trinity reports $10.2 billion in unrestricted cash and investments, including 180 days cash on hand compared to 211 days in fiscal year 2022, in its latest filing.

Trinity is focused on diversifying its business by shifting to ambulatory, home health, PACE, urgent care, specialty pharmacy and telehealth. The filing also noted the recent launch of a new care delivery model dubbed TogetherTeam, involving on-site and virtual nurses, that is expected to be implemented systemwide by the end of its 2024 fiscal year.

Salaries, wages and employee benefit costs rose 2.2%, offset by a reduction of $54.6 million in executive compensation and $39.7 million more pharmacy rebates than in the same period in fiscal year 2022. Same-facility contract labor costs decreased more than 40% to $193.9 million, reflecting “unprecedented” pandemic-related costs during the third quarter in 2022. 

Trinity “continues to use strong cost controls over contract labor and other operational spending as colleague investment and utilization of its FirstChoice internal staffing agency promotes labor stabilization,” management wrote.

Trinity Health spans 88 acute care hospitals and hundreds of other care locations in 26 states and purports to have the second-largest Medicare PACE (Program of All-inclusive Care for the Elderly) program in the country. It provided services to 1.3 million people and reported a community benefit and charity of $1.4 billion in fiscal year 2022.