Catholic Healthcare West Cuts Operating Losses by More Than 50%
Catholic Healthcare West yesterday announced that its operating losses in the fiscal year that ended June 30 are more than 50% smaller than they were last year, the Sacramento Bee reports. CHW reported an operating loss of $119 million on revenues of $4.8 billion; last year, the company had an operating loss of $306 million on $4.5 billion in revenue. The Bee reports that CHW's losses decreased in part because of "higher than expected" operating income from its subsidiary Mercy Healthcare Sacramento, a six-hospital system. After an operating loss of $11 million last year on revenues of $799 million, Mercy reported an operating profit of $38 million on revenues of $844 million. The improvements follow three years of losses totaling $743 million for CHW. The Bee reports that the financial turnaround is due in part to an "administrative redesign." For example, in February, CHW announced that it would cut 350 jobs and "condense" its 10 regional health systems. Also, CHW implemented a "standardized management system" that saved about $20 million. CHW executive vice president Michael Blaszyk said that ending some managed care contracts and receiving "better payments" on others also "helped the system improve its bottom line." However, with CHW facing costs associated with state-mandated seismic retrofitting and "escalating labor costs," Blaszyk said it "won't be easy" for CHW to turn a profit next year (Rapaport, Sacramento Bee, 11/2).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.