Labor shortages will strain hospital budgets through 2022, Moody’s says

https://www.healthcaredive.com/news/labor-shortages-pressure-hospital-budgets-expenses/607759/

Dive Brief:

  • The delta variant of the coronavirus continues to pile on staffing challenges for hospitals as they spend more resources on recruiting and retaining employees, jack up benefit options and offer steep sign-on bonuses, according to a Tuesday report from Moody’s Investors Service.
  • Those expenses will strain hospital profitability at a time when lucrative non-emergency procedures are on hold in some areas to handle incoming COVID-19 inpatients. Moody’s expects the weight on hospital budgets to continue through next year.
  • Although demand for temporary nursing staff dipped last week, it is still well beyond pre-pandemic levels, according to data gathered by Jefferies analysts. Crisis jobs — those that are rapid response or bill more than $100 an hour — represent more than three quarters of staffing firm Aya Healthcare’s openings, the third highest percentage Jefferies has recorded.

Dive Insight:

The highly contagious delta variant is wreaking havoc on the U.S. healthcare system as mostly unvaccinated people are filling ICUs more than a year and half into the pandemic. Clinicians who have throughout that time been stressed working long and difficult hours are reporting intense burnout as some mull leaving the profession altogether.

Meanwhile, vaccine mandates have gone into effect for many hospitals. Although they report that the vast majority of employees are complying, even the small losses of those who refuse can take a hit to staffing resources.
This need has driven increases to the salaries nurses can command, as well as to benefit packages, sign-on bonuses and the offer of services like child care, Moody’s said.

The report also noted that the current shortage — unlike previous ones — also includes nonclinical staff such as dietary and environmental services workers.

While Moody’s focuses on nonprofit operators, expense challenges will be an important metric to watch during the upcoming earnings season. Although all major for-profit hospital operators beat Wall Street expectations on earnings and revenue in Q2 and most posted profit increases, expenses were a rising line item.

Hospital labor expenses rise

For-profit health systems’ labor costs year over yearhttps://datawrapper.dwcdn.net/G7DCw/2/

And consultancy Kaufman Hall has warned U.S. hospitals will lose about $54 billion in net income this year, while an earlier Moody’s report predicted impacts to the country’s health system from COVID-19 will last for decades.

As the Biden administration works to encourage more vaccinations through a combination of carrots and sticks, it remains unclear when delta may peak and what future variants could bring. Even after hospitals are on more stable ground in terms of capacity, further challenges will remain as patients return for care they deferred earlier.

And there are more long-term concerns as well. “Even after the pandemic, competition for labor is likely to continue as the population ages — a key social risk — and demand for services increases,” according to the Moody’s report.

Jefferies analysts agreed, saying the demand for temp nurses will go down but remain elevated. “Additionally, the fundamental demand drivers for nurses that existed even before COVID (i.e., nurse population demographics) have been boosted by the lingering effects of the pandemic on the profession and are likely to boost demand for temp staffing post-2022,” they wrote in the Wednesday note.

‘A triple whammy’: Why hospitals are struggling financially amid the delta surge

Hospitals were struggling before the pandemic. Now they face financial  disaster (opinion) - CNN

n addition to treating an influx of Covid-19 patients, many hospitals are struggling with what one administrator calls a “triple whammy” of financial burdens—stemming from plummeting revenue, higher labor costs, and reduced relief funds, Christopher Rowland reports for the Washington Post.

Hospitals in less-vaccinated areas face spiking labor costs

In areas with low vaccination rates, particularly in southern and rural communities, hospitals have been overwhelmed with Covid-19 patients, exacerbating labor shortages as workers burn out or leave for more lucrative positions, Rowland reports.

“The workforce issue is just dire,” Stacey Hughes, EVP of government relations and policy for the American Hospital Association (AHA), said. “The delta variant has wreaked significant havoc on hospitals and health systems.”

In Louisiana, Mary Ellen Pratt, CEO of St. James Parish Hospital, said many nurses quit due to the grueling conditions as Covid-19 cases spiked. “I didn’t have any extra money to incentivize my staff to pick up additional shifts,” she said. “This is coming out of bottom-line money I don’t have.”

Separately, Lisa Smithgall, SVP and chief nursing executive at Ballad Health, said the health system—which has 21 hospitals in eastern Tennessee and southwestern Virginia—has faced similar problems retaining staff amid Covid-19 surges.

“We knew we were at risk in our region because of where we live and because of our vaccination rate being so poor,” Smithgall said. “At one point, we were seeing four or five nurse resignations per week. They couldn’t do it again; they emotionally didn’t have it. They were so upset with our community.”

To fill in these growing gaps in their workforce, many hospitals have had to turn to costly contract workers, Rowland reports—a significant financial burden that further strains hospitals’ resources.

For example, Ballad Health went from hiring fewer than 75 contract nurses before the pandemic to 150 in August 2020 and 450 in August 2021. Moreover, according to Smithgall, contract nurses previously made double or triple what permanent staff nurses made, but now Ballad sometimes has to pay up to seven times as much for contract nurses as hospitals compete for workers to fill shifts.

Delayed elective surgeries deepen hospitals’ financial struggles

Many hospitals, including those in areas with high vaccination rates, have delayed elective surgeries, a crucial source of revenue, amid nationwide surges in Covid-19 cases, Rowland reports—further compounding financial struggles for many organizations.

On Aug. 26, Ballad Health postponed a long list of elective surgeries—including hernia repair, cardiac and interventional radiology procedures, joint replacements, and nonessential spine surgery—to preserve space in its hospitals and conserve workers. Ballad is now allowing elective surgeries again, but only for a limited number of procedures that do not require overnight stays.

Similarly, St. Charles Health System in Oregon postponed elective surgeries in August “while we responded to a surge that was significantly greater and much more sudden than the surge in 2020,” Matt Swafford, the health system’s VP and CFO, said.

According to Swafford, the health system lost $5 million a week through August and September, around $1 million of which was repayment of emergency advances on Medicare reimbursements from last year.

“I don’t think anybody saw this level of surge coming in 2021 after what we saw in 2020,” he said. “We’re just not equipped to be able to simultaneously respond to the urgent needs of the community [for more typical surgeries and care] at the same time that a third of our beds are occupied by highly infective Covid patients.”

Many hospitals likely to end the year at a deficit

Further compounding the issue, according to Moody’s Investors Service, is that the provider relief funds that previously made up 43% of operating cash flow at nonprofit and government-run hospitals in the United States are now dwindling down.

In addition, the latest portion of provider relief funds to be distributed must be based on expenses incurred by hospitals before March 31, 2021, which don’t account for months of the delta surge, Rowland reports.

Premier, a group purchasing and technology company serving more than 4,000 hospitals and health systems, analyzed payroll data of 650 hospitals and found that U.S. hospitals have spent a total of $24 billion a year during the pandemic to cover excess labor costs, primarily for overtime and contract nurses. This was an increase of 63% from October 2019 to July 2021, Rowland reports, with hospitals in the Upper Midwest and across the South seeing the largest increases.

“It’s going to leave them huge deficits that they are going to have to work out of for years to come,” Michael Alkire, Premier’s CEO, said.

14 health systems with strong finances

What next for the US dollar? - TalkingPoint - Schroders

Here are 14 health systems with strong operational metrics and solid financial positions, according to reports from Fitch Ratings, Moody’s Investors Service and S&P Global Ratings.

1. Advocate Aurora Health has an “Aa3” rating and positive outlook with Moody’s. The health system, which has dual headquarters in Milwaukee and Downers Grove, Ill., has a leading market share in two regions and strong financial discipline, Moody’s said. The credit rating agency said it expects Advocate Aurora Health’s operating cash flow margins to return to pre-pandemic levels. 

2. Pinehurst, N.C.-based FirstHealth of the Carolinas has an “AA” rating and stable outlook with Fitch. The health system has a strong financial profile and stable operating performance, despite disruption from the COVID-19 pandemic, Fitch said. The health system’s revenue in the first quarter of fiscal 2021 rebounded to levels close to historical trends, according to the credit rating agency. 

3. Indianapolis-based Indiana University Health has an “Aa2” rating and stable outlook with Moody’s and an “AA” rating and positive outlook with Fitch. Cost controls and patient volume will help the system sustain strong margins and liquidity, Moody’s said. 

4. Rapid City, S.D.-based Monument Health has an “AA-” rating and stable outlook with Fitch. The health system has solid operating margins that Fitch expects to remain stable over the near term. Monument Health’s operating margins will continue to support liquidity growth and capital spending levels, the credit rating agency said. 

5. Chicago-based Northwestern Medicine has an “Aa2” rating and stable outlook with Moody’s, and an “AA+” rating and stable outlook with S&P. The system’s consolidated operating model will allow it to maintain a strong financial position while effectively executing strategies, Moody’s said. The credit rating agency expects Northwestern Medicine to expand its prominent market position in the broader Chicago region because of its strong brand and affiliation with Northwestern University’s Feinberg School of Medicine. 

6. Renton, Wash.-based Providence has an “AA-” rating and stable outlook with Fitch and an “Aa3” rating and stable outlook with Moody’s. Fitch said Providence has a long-term strategic advantage over most of its peers because it has invested heavily in developing technology in recent years, and the system’s plan to transform healthcare delivery through the use of data and technology has been undeterred through the COVID-19 pandemic. Fitch said it expects Providence’s cash flow margins to be close to 7 percent in the coming years. 

7. Livingston, N.J.-based RWJBarnabas Health has an “Aa3” rating and stable outlook with Moody’s. Moody’s said it expects RWJBarnabas, the largest integrated academic health system in New Jersey, to see near-term revenue growth and to execute on several strategic fronts while achieving targeted financial performance.  

8. Broomfield, Colo.-based SCL Health has an “AA-” rating and stable outlook with Fitch and an “Aa3” rating and stable outlook with Moody’s. The health system has consistently improved its liquidity levels and has a long track record of exceptional operations, Fitch said. SCL Health is well positioned for change in the healthcare sector because it has built up cash reserves over time, according to the credit rating agency. 

9. San Diego-based Scripps Health has an “Aa3” rating and stable outlook with Moody’s. The health system has ample liquidity coverage, an extensive footprint and strong brand and market share within San Diego County, Moody’s said. The credit rating agency said it expects Scripps to weather current operating challenges and to grow operating cash flow over the long term. 

10. Norfolk, Va.-based Sentara Healthcare has an “Aa2” rating and stable outlook with Moody’s. The health system has strong margins, and Moody’s said it expects the system to maintain a strong financial position and balance sheet. 

11. Arlington-based Texas Health Resources has an “Aa2” rating and stable outlook with Moody’s. The health system has a strong cash position, which will be boosted by favorable investment gains and bond proceeds, Moody’s said. Based on performance in the second quarter of this year, Moody’s expects Texas Health Resources’ patient volume and operating cash flow margins to recover to pre-COVID-19 levels. 

12. Iowa City-based University of Iowa Hospitals & Clinics has an “Aa2” rating and stable outlook with Moody’s. The credit rating agency said it expects the system to maintain strong operating performance and cash flow. The system benefits as the only academic medical center in Iowa, according to Moody’s. 

13. Des Moines, Iowa-based UnityPoint Health has an “AA-” rating and stable outlook with Fitch. The system has strong leverage metrics, and it benefited from strong market returns during the pandemic. The system’s days with cash on-hand increased to 285 days at the end of 2020, up from 231 days at the end of 2019, according to the credit rating agency. 

14. Kansas City-based University of Kansas Health System has an “AA-” rating and stable outlook with Fitch. The health system has solid operating results and has sustained significant revenue growth, Fitch said. The system’s profitability dipped in fiscal year 2020 because of the COVID-19 pandemic, but its profitability rebounded in fiscal year 2021, according to the credit rating agency. 

Hospitals projected to lose $54 billion in net income this year

https://www.healthcarefinancenews.com/news/hospitals-projected-lose-54-billion-net-income-year

Hospitals and Health Systems Projected to Lose About $54B in Net Income in  2021 | HealthLeaders Media

Higher expenses for labor, drugs and supplies as well as a continuation of delayed care during the ongoing COVID-19 pandemic is projected to cost hospitals an estimated $54 billion in net income over the course of this year, according to a new Kaufman Hall analysis released by the American Hospital Association.

Hospitals and health systems are seeing sicker patients, the report said. This includes COVID-19 patients and patients who put off care during the pandemic. They are requiring longer lengths of stay and more services than prior to the pandemic in 2019, the report said.

The seven-day average of new hospital admissions of patients with COVID-19 has increased 488%, from 1,900 on June 19 to 11,168 on September 14, the report said, citing recent data from the Centers for Disease Control and Prevention.

Many hospitals are also reportedly spending a lot more on staffing, paying for contract or travel nurses due to shortages.

WHY THIS MATTERS

The report projects hospitals nationwide will lose an estimated $54 billion in net income over the course of the year, even after taking into account federal Coronavirus Aid, Relief, and Economic Security (CARES) Act funding from last year

If there were no relief funds from the federal government, losses in net income would be as high as $92 billion. 

However, the AHA said, the uncertain trajectory of the Delta and Mu variants in the U.S. this fall could result in even greater financial uncertainty for hospitals.

Despite the recent announcement of additional provider relief funds, none have yet to be allocated or distributed, the AHA said. 

THE LARGER TREND

This latest analysis incorporates actual hospital performance data in the first and second quarters of this year, from before the latest surge. Projections were then made for the remainder of 2021 based on this data.

Based on the analysis, median hospital margins are projected to be 11% below pre-pandemic levels by year’s end. More than a third of hospitals are expected to end 2021 with negative margins.

Many hospitals were financially challenged and already operating in the red heading into the COVID-19 pandemic, the AHA said last year.

CARES Act funding helped hospitals and health systems, but covered only a portion of the more than $323 billion in losses hospitals were expected to have in 2020. 

The government allocated a total of $175 billion in relief funds to providers.

ON THE RECORD 

“America’s hospitals and health systems continue to face significant, ongoing instability and strain as the COVID-19 pandemic endures and spreads,” said AHA President and CEO Rick Pollack. “With cases and hospitalizations at elevated levels again due to the rapid spread of the Delta variant, physicians, nurses and other hospital caregivers and personnel are working tirelessly to care for COVID-19 patients and all others who need care. At the same time, hospitals are experiencing profound headwinds that will continue throughout the rest of 2021.”

CommonSpirit’s net income jumps to $5.5B in 2021, reversing major COVID-19 loss

Dive Brief:

  • Nonprofit hospital giant CommonSpirit Health reported a better operating performance in its 2021 fiscal year than in 2020, but said in financial results released Friday it expects COVID-19 to continue to pressure its operations in the coming year.
  • The Chicago-based Catholic system reported operating income of $998 million for its fiscal year ended June 30, compared to an operating loss of $550 million the year prior.
  • However, excluding federal relief funds from the Coronavirus Aid, Relief, and Economic Security Act passed last March and a sale of part of its stake in an unnamed joint venture, the system would be posting an operating loss of $215 million.

Dive Insight:

It’s CommonSpirit’s second full fiscal year as a a combined organization after the merger of Dignity Health and CHI was completed in February 2019. The marriage resulted in the largest nonprofit system in the U.S., with 140 hospitals and roughly 1,500 sites across 21 states.

However, that scale didn’t protect CommonSpirit from being slammed by the pandemic’s financial effects in 2020, as lower admissions, badly performing investments and higher charity and uncompensated care expenses severely depressed its bottom line.

Though many COVID-19 headwinds continued into its 2021 fiscal year, returning patients, stronger investment performance and cost reduction initiatives helped CommonSpirit to net income of $5.5 billion for the year, compared to its steep loss of $524 million in 2020.

CommonSpirit’s revenues rose more than 12% compared to the 2020 fiscal year, mostly due to recovering patient volume and the addition of new care sites, including Virginia Mason Health System in the Pacific Northwest and Yavapai Regional Medical Center in Arizona, and expanded ambulatory surgical center relationships in several states.

Expenses were also up by 7% year over year mostly due to “significant” pandemic-related expenses, CommonSpirit said in its release on the results.

However, the higher costs were offset by cost management, including more than $400 million in cost reductions in the fiscal year. And, due to stronger financial markets, the system’s balance sheet was also boosted by $3.4 billion in investment income.

But despite the turnaround, CommonSpirit management warned COVID-19 is still likely to dog the system’s performance as it enters its third fiscal year as a combined entity.

The recent surge in patients due to the rise of the highly infectious delta variant caused the system’s COVID-19 inpatient census to jump to almost 2,900 in early September. That’s up from a low of 340 in June, though still significantly lower than CommonSpirit’s previous peak of more than 4,100 COVID-19 inpatients recorded in early January.

Amid the rising cases, the system said it’s emphasizing employee retention as staffing shortages, especially acute among nurses, continue to stress providers nationwide.

CommonSpirit noted it doesn’t expect personal protective equipment or ventilator availability to be a problem, despite increasingly taxed capacity and rising need in the U.S.

Like other providers, the nonprofit operator reported it saw patients begin to return for preventative and delayed care throughout the fiscal year, though that return decelerated in tandem with escalating COVID-19 cases.

Same-facility adjusted admissions dropped 2.7% year over year, while outpatient visits rose 5.1% overall.

Additionally, demand for virtual visits has remained strong even as in-office volumes have recovered. Telehealth use has stabilized at roughly 13% of overall volumes, CommonSpirit said, though that’s down from a high of more than 37% notched in April of last year.

Net patient and premium revenues jumped more than 10% year over year due to higher patient acuity, the YRMC and VMHS affliliations and stable payer mix, CommonSpirit said. Those tailwinds were partly offset by volume shortfalls due to the pandemic.

CommonSpirit, which said it was still on track to achieve the cost-savings goals outlined in CHI and Dignity’s 2019 merger plans, expects to release a new five-year strategic roadmap in the fall.

18 health systems with strong finances

Hospital Mergers, Acquisitions, and Affiliations | Case Study – RMS

Here are 18 health systems with strong operational metrics and solid financial positions, according to reports from Fitch Ratings, Moody’s Investors Service and S&P Global Ratings.

1. Altamonte Springs, Fla.-based AdventHealth has an “Aa2” rating and stable outlook with Moody’s and an “AA” rating and a stable outlook with Fitch. The system has strong profitability, solid liquidity and presence in several high growth markets, Fitch said.

2. St. Louis-based BJC HealthCare has an “AA” rating and stable outlook with S&P and an “Aa2” rating and stable outlook with Moody’s. The health system has a leading market share and a highly regarded reputation, particularly for its flagship hospitals that are affiliated with Washington University School of Medicine in St. Louis, S&P said. The health system has consistently produced stable earnings and cash flow, even during the COVID-19 pandemic, according to the credit rating agency. 

3. Dallas-based Children’s Health System of Texas has an “AA” rating and stable outlook with Fitch. The system has robust operating profitability, good expense management and strong EBITDA margins, according to Fitch. 

4. Cleveland Clinic has an “Aa2” rating and stable outlook with Moody’s. The system’s international brand will allow it to grow revenue outside of the northeast Ohio market and offset the effects of the pandemic on patient volume, Moody’s said. The credit rating agency expects the system to maintain good cash flow margins. 

5. Evansville, Ind.-based Deaconess Health System has an “AA” rating and stable outlook with Fitch. The health system has strong operating performance and an expanding footprint in a stable and economically diverse service area, Fitch said. Investments in core service lines should help support patient volume growth, according to the credit rating agency. 

6. Durham, N.C.-based Duke Health has an “AA” rating and stable outlook with Fitch. The system has a strong clinical reputation and a solid balance sheet with substantial liquidity reserves, Fitch said. 

7. Pinehurst, N.C.-based FirstHealth of the Carolinas has an “AA” rating and stable outlook with Fitch. The health system has a strong financial profile and stable operating performance, despite disruption from the COVID-19 pandemic, Fitch said. The health system’s revenue in the first quarter of fiscal 2021 rebounded to levels close to historical trends, according to the credit rating agency. 

8. Milwaukee-based Froedtert Health has an “AA” rating and stable outlook with Fitch. The system has a solid market position and a robust liquidity position, Fitch said. The credit rating agency expects Froedtert to maintain robust operating cash flow levels. 

9. Indianapolis-based Indiana University Health has an “Aa2” rating and stable outlook with Moody’s and an “AA” rating and positive outlook with Fitch. Cost controls and patient volume will help the system sustain strong margins and liquidity, Moody’s said. 

10. IHC Health Services, the borrowing group of Salt Lake City-based Intermountain Healthcare, has an “Aa1” rating and stable outlook with Moody’s. Intermountain has a leading statewide market position, low debt levels and strong cash levels, Moody’s said. The credit rating agency expects Intermountain will sustain strong margins and cash levels. 

11. Falls Church, Va.-based Inova Health System has an “Aa2” rating and stable outlook with Moody’s. The system has a strong financial profile, and Moody’s expects Inova’s balance sheet to remain exceptionally strong. 

12. Rochester, Minn.-based Mayo Clinic has an “Aa2” rating and stable outlook with Moody’s. The health system has strong balance sheet measures, an excellent market position and strong patient demand at its three academic campuses in Minnesota, Arizona and Florida, Moody’s said. The credit rating agency expects strong patient demand and steps taken by management to allow Mayo to maintain adequate cash flow and strengthen balance sheet measures. 

13. Traverse City, Mich.-based Munson Healthcare has an “AA” rating and stable outlook with Fitch. The system has strong leverage and liquidity, Fitch said. The credit rating agency expects Munson to maintain solid operating cash flow margins. 

14. Tupelo-based North Mississippi Health Services has an “AA” rating and stable outlook with Fitch. The system has a leading market share in a large 20-county service area and strong adjusted leverage metrics, Fitch said. 

15. Chicago-based Northwestern Memorial HealthCare has an “Aa2” rating and stable outlook with Moody’s and an “AA+” rating and stable outlook with S&P. The health system had strong pre-COVID margins and liquidity, Moody’s said. The credit rating agency expects the system to maintain strong operating cash flow margins. 

16. Columbus-based OhioHealth has an “Aa2” rating and stable outlook with Moody’s and an “AA+” rating and stable outlook with S&P. The system has a leading market position and opportunities for service line expansion, Moody’s said. The credit rating agency expects the system’s strong liquidity to provide ample cushion for volatility in investment returns. 

17. Stanford (Calif.) Health Care has an “AA” rating and stable outlook with Fitch. The system has broad reach and is a clinical destination for high acuity services, Fitch said. The credit rating agency expects the system to sustain strong EBITDA margins. 

18. Iowa City-based University of Iowa Hospitals & Clinics has an “Aa2” rating and stable outlook with Moody’s. The credit rating agency expects the system to maintain strong operating performance and cash flow. The system benefits as the only academic medical center in Iowa, according to Moody’s. 

10 health systems with strong finances

Here are 10 hospitals and health systems with strong operational metrics and solid financial positions, according to reports from Fitch Ratings and Moody’s Investors Service. 

1. Altamonte Springs, Fla.-based AdventHealth has an “Aa2” rating and stable outlook from Moody’s. The credit rating agency said the system benefits from strong operating cash flow margins, low operating leverage and a large scale with presence in multiple states.  

2. Children’s Hospital of Philadelphia has an “Aa2” rating and stable outlook from Moody’s. The credit rating agency said the rating is reflective of Children’s Hospital of Philadelphia’s strong market position and brand equity as a top U.S. children’s hospital with advanced clinical research. The pediatric hospital network also has strong liquidity.

3. Cleveland Clinic has an “Aa2” rating and stable outlook from Moody’s. The credit rating agency said the health system benefits from its reputation as an international brand, which will allow it to grow revenue outside of the Ohio market. Moody’s said it maintains good cash flow margins and therefore very strong liquidity.

4. Cottage Health in Santa Barbara, Calif., has an “AA-” rating and stable outlook from Fitch. The credit rating agency said Cottage benefits from consistently strong profitability, a strong balance sheet and leading market position. Fitch also said the health system has broad reach in a service area that has high demand for acute care services. 

5. Froedtert Health in Wauwatosa, Wis., has an “AA” rating and stable outlook from Fitch. The credit rating agency said the rating reflects the health system’s solid market position and robust liquidity position, as well as its strong utilization trends and operational metrics in recent years. 

6. Indiana University Health in Indianapolis has an “AA” rating and positive outlook from Fitch. The credit rating agency said the health system has a long track record of strong operating margins and a “remarkably solid” balance sheet. The system also benefits as the largest healthcare system and academic medical center in Indiana, according to Fitch.

7. Vineland, N.J.-based Inspira Health has an “AA-” rating and stable outlook from Fitch. The credit rating agency said the rating is supported by Inspira’s stable financial profile, leading market position, large medical staff and expansive outpatient network. Fitch also said Inspira saw a strong operating performance through the construction and transition of its new campus, an IT implementation and through the peak of the pandemic.

8. Sanford Health in Sioux Falls, S.D., has an “AA-” rating and stable outlook from Fitch. The credit rating agency said the “AA-” rating reflects Sanford’s leading inpatient market share in multiple states and strong financial profile. Fitch also said Sanford’s growing health plan and plan for continued improvement and balance sheet growth are credit positives. 

9. Spectrum Health in Grand Rapids, Mich., has an “Aa3” rating and stable outlook with Moody’s. The credit rating agency said the health system has a stable operating performance and strong balance sheet metrics. In particular, the system generated positive margins even without federal aid in fiscal year 2020. Moody’s said the health system will continue to benefit from a strong market share for patient care in western Michigan. 

10. Texas Children’s Hospital in Houston has an “Aa2” rating and stable outlook from Moody’s. The credit rating agency said the children’s hospital network benefits from favorable leverage metrics and strong liquidity. Moody’s also said Texas Children’s has very strong patient demand and high acuity services as the academic medical center for Baylor College of Medicine’s pediatric department in Houston.

Sutter Health to lay off 400 workers

Sutter Health fined again over not notifying nurses about COVID-19 exposure

As part of a financial restructuring plan, Sacramento, Calif.-based Sutter Health will issue another round of layoffs this year, according to the Sacramento Business Journal.  

The health system said it plans to lay off 400 more employees. These newly announced layoffs are in addition to 277 information technology jobs that were cut April 2. 

Sutter said most of the new layoffs affect employees in administrative positions in benefits, human resources, data services and accounting. The layoff notice said many of these employees were working remotely or in the field. 

Sutter told the Business Journal that it’s working to evaluate every aspect of its business model.

“Moving forward, we will continue to work to minimize staff reductions and their impact on our dedicated employees as we look for ways to eliminate variation, streamline resources and more efficiently manage our indirect costs,” Sutter told the Business Journal.

Sutter ended 2020 with a $321 million operating loss, including $800M in funding from the Coronavirus, Aid, Relief and Economic Security Act. Without the funding, Sutter’s operating loss would have been $1.1 billion. As a result, Sutter initiated a sweeping review of its finances in March 2021. 

Sutter Health also gave voluntary severance packages to 800 workers in 2020.