Trinity Health to furlough 2,500 employees in Michigan

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The two health systems that comprise Trinity Health’s Michigan region will furlough 2,500 employees at eight hospitals, according to

Livonia-based Saint Joseph Mercy Health System and Muskegon-based Mercy Health said the furloughs will occur over the next few weeks and will mostly affect nonclinical workers.

The furloughs, which represent 10 percent of the workforce at the two systems, will enable the hospitals to “focus resources on the functions directly related to essential COVID-19 patient care needs, while protecting people and helping to prevent the spread of the virus,” according to the report.

Livonia-based Trinity Health said the goal is for the furloughs to be temporary. 

To help offset financial losses from the COVID-19 pandemic, Trinity’s executive leaders are taking up to 25 percent pay cuts, and performance-based bonuses are being eliminated, according to the report. 




Bon Secours Mercy Health to furlough 700, estimates $100M monthly operating loss

Bon Secours Mercy Health Sells $1.2B Majority Stake in Ensemble ...

Citing a revenue hit from the COVID-19 pandemic, Cincinnati-based Bon Secours Mercy Health will furlough 700 employees and freeze wages of all nonclinical personnel, according to The Cincinnati Business Journal

The furloughs will affect workers in the system’s shared services business office, which includes entry-level workers and those who are senior vice presidents. No caregiver, pharmacy or supply chain jobs will be affected.

The furloughs are expected to begin next week and last 30 to 90 days, depending on how long the pandemic lasts, according to Bon Secours Mercy Health CEO John Starcher.

The cost-cutting measures are a result of an anticipated decline in revenue due to government-imposed bans on elective procedures. Bon Secours Mercy Health estimates it will see an operating loss of at least $100 million per month while the pandemic lasts.

In addition to the furloughs and wage freeze, the health system is freezing hiring for all noncritical care positions.

“We don’t shy away from making the difficult decisions, and this certainly is one of those, because we always have a mind’s eye on what the long-term ramifications and implications are,” Mr. Starcher told the Business Journal. “We’re laser-focused on making sure this ministry is as successful and vibrant for the next 150 years as it’s been for the last 150.”






Hospital leaders plead for financial help, warn of closures, missing payroll

Hospital executives from across the country sounded the alarm Saturday about the dire need for federal financial aid as their cash on hand continues to erode amid the coronavirus pandemic.

“We’ll exhaust all avenues to make payroll in the next few weeks,” Scott Graham, CEO of Three Rivers and North Valley Hospitals in rural Washington said of Three Rivers during a call with reporters Saturday morning.

The American Hospital Association is urging lawmakers on Capitol Hill to consider deploying at least $100 billion to aid hospitals fight against the outbreak of the novel coronavirus. The relief package would fund medical personnel, supplies and infrastructure, and expenses related to COVID-19, Rick Pollack, CEO of AHA, told reporters.

Without a relief package, Pollack warned it “could mean that many hospitals won’t survive.” The pleas came as Congress debates a stimulus package this weekend.

American life has ground to halt as experts urge the public to distance themselves from others in an attempt to slow the spread of the virus. Many states closed bars and restaurants with virtually all group events canceled. Likewise, hospitals have been asked — or required in some locales — to halt all elective procedures to free up resources for an expected surge of patients.

But hospitals rely on those typically lucrative procedures to drive revenue. Some hospitals are starting to wonder how they’ll keep the lights on after facing the reality of canceled procedures and the need to increase staff and supplies to combat the pathogen.

On top of that, hospitals are unable to get much needed supplies as some vendors are requiring payment on delivery, funds they do not have.

There is no time to waste, hospital leaders warned, citing less than two weeks cash on hand.

“We need to get this done now,” Pollack said of an emergency funding package from the federal government.

Despite the dire financial strain, hospitals are still preparing to increase capacity to meet a surge in demand. It’s unclear whether they will be reimbursed for all expenses related to increasing the amount of beds, capacity and supplies.

Some areas were already facing a shortage of nurses and physicians before the outbreak and anticipate that to become worse.

“In spite of our existing financial challenges, we are planning to increase capacity because that is what we must do,” LaRay Brown, CEO of One Brooklyn Health System in New York, said Saturday. One Brooklyn​ operates three hospitals, nursing homes and community health centers in New York, serving about 2 million.

Brown said all hospitals in New York were asked Friday by state health officials to submit plans for the upping of capacity by 50% of existing bed count.

Brown anticipates receiving some support from the state of New York but seemed wary of the state’s future financial footing as it battles the pathogen as well, and with a weakened tax base as businesses have shuttered.

“This is why I’m on this call,” Brown said. “We need immediate cash relief from the federal government.”




Financial updates from Scripps, Providence, 5 more health systems

The following seven health systems recently released financial updates:

1. Phoenix-based Banner Health saw its revenue climb 10.6 percent year over year to $9.4 million in 2019. The revenue growth was attributed to a 7 percent growth in care delivery revenue and a 29 percent increase in revenue from its insurance division. Overall, Banner saw its net income climb from $44 million in 2018 to $726.8 million in 2019 due to strong investment gains.

2. Henry Ford Health System, based in Detroit, recorded a net income of $354.5 million in 2019, more than four times the $86.8 million reported in 2018. In 2019, the health system generated $6.3 billion in revenue, up from $5.9 billion the same period one year prior. Part of the revenue increase was attributed to a rise in net patient revenue from outpatient visits and expanded specialty pharmacy activity.

3. Portland-based MaineHealth reported an operating gain of $82.8 million in the year ended Sept. 30, 2019, a 21.9 percent increase from an operating gain of $67.9 billion reported in the same period in 2018. MaineHealth’s revenue increased to $2.7 billion, compared to $2.5 billion reported in the same period one year prior. Overall, the system recorded a net income of $119.1 million, up slightly from the $118.2 million reported in fiscal 2018.

4. New York-based Montefiore Health System posted an operating revenue of $6.24 billion in 2019, which compares to an operating revenue of $5.91 billion in 2018. After factoring expenses, nonoperating gains and the revenue it generated from a vital access provider program, the health system ended the year with a net income of $8.67 million, down from the $53.48 million reported in 2018. Montefiore attributed the financial setback in net income to participation in some value-based contracts and underpayments from government-run insurance programs.

5. Renton, Wash.-based Providence posted a net income of $1.36 billion in 2019, compared to a deficit of $445 million in 2018. The health system reported revenue of $25.03 billion in 2019, up 2 percent from the $24.43 billion reported in 2018. The revenue increase was largely attributed to patient volume increases. The system’s operating expenses rose to $24.65 billion in 2019. This compares to $24.26 billion in 2018.

6. Trinity Health, based in Livonia, Mich, recorded an operating income of $102.6 million in the first half of fiscal year 2020, which ended Dec. 31. That’s compared to the same period of fiscal 2019, when the health system recorded operating income of $113.4 million. After factoring in nonoperating gains, Trinity reported a net income of $805.7 million in the first half of fiscal 2020, compared to an operating loss of $301.5 million in the same period one year prior.

7. San Diego-based Scripps Health reported revenue of $780.2 million in the first quarter of fiscal year 2020, which ended Dec. 31. This compares to the same period in fiscal 2019, in which Scripps recorded revenue of $747.2 million. The health system’s expenses also increased 4.3 percent year over year in the first quarter of fiscal 2020. In the first quarter of fiscal 2020, Scripps posted an operating income of $1.9 million, more than triple the $607,000 in operating income posted in the same quarter in fiscal 2019. Scripps ended the first quarter of fiscal 2020 with a net income of $141.5 million, compared to a net loss of $171 million in the same period a year earlier.



Nonprofit hospital outlook negative as COVID-19 restricts cash flow, Moody’s says

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Moody’s Investor Services changed its outlook for nonprofit hospitals from stable to negative because of how the coronavirus outbreak is expected to affect cash flow.

Four things to know:

1. While Moody’s previously expected 2-3 percent growth in cash flow for 2020, this is no longer the case. Moody’s said the coronavirus situation is changing too quickly to estimate a specific range for this year, but nonprofit hospitals will likely see lower cash flow compared to 2019.

2. Moody’s said nonprofit hospitals will take a revenue hit as they cancel lucrative elective surgeries and procedures to prepare for a surge in COVID-19 patients. 

3. Revenue declines will be paired with higher expenses as the need for equipment and supplies increases.

4. Moody’s predicts the containment of the outbreak will come in 2020, and the economy will start to gradually recover. Still, analysts note there is a high degree of uncertainty and a risk that the outbreak could last longer than predicted.