Care New England reports $13.8M operating loss in Q1

CARE NEW ENGLAND HEALTH SYSTEM reported an operating loss of $13.8 million in the first quarter of 2023 ending Dec. 31, according to CNE financial statements. Kent County Memorial Hospital is owned by CNE. / COURTESY KENT COUNTY MEMORIAL HOSPITAL

PROVIDENCE – Care New England Health System reported an operating loss of $13.8 million in the first quarter of 2023 ending Dec. 31, showing signs of recovery after a challenging 2022.

While still reporting an operating loss, the system shows improvements from last year, when the first quarter of fiscal 2022 recorded a $20.9 million operating loss. Care New England also reported a net income of $1.34 million during the quarter, thanks to net non-operating gain of $15 million, due to some favorable investment returns.

“CNE management’s growth and cost management initiatives, including action plan implementation, labor productivity monitoring, and revenue cycle improvements, are making an impact on performance,” said Care New England in the report. “Overall, the implementation of the action plans for both revenue and expense were severely impacted by the COVID-19 aftermath in 2022 and is continuing in 2023.”

The system reported an operating revenue of $308 million during the quarter, that was however offset by $322 million in operating expenses. Total expenses were $2 million higher than forecasted, something that the system attributes to “the cost of staffing, one-time salary expenses relating to stay incentives and settlements in operations, length of stay increases and strategic initiatives costs.”

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“The greatest financial challenge affecting CNE through the first quarter of FY 2023 is the stabilization of performance during the pandemic aftermath,” Care New England wrote in its filing.

Another driver of the negative performance were shortfalls at Kent County Memorial Hospital, Care New England Medical Group LLC, the Providence Center and the Kent County Visiting Nurse Association. In particular, the system said low medical and surgical volumes, inconsistent outpatient volumes, high length of patient stay and staffing shortages at Kent Hospital impacted the system’s overall performance.

“Management has developed, and is continuing to develop, action plans with the intent to stabilize these patient activity trends as well as the alignment of staffing to the volume levels; however, action plan performance versus plan through the first quarter of FY 2023 was behind forecast,” Care New England wrote.

In comparison, net patient service revenue was strong throughout the quarter at both Women & Infants Hospital and Butler Hospital.

Care New England wrote the system continues to be impacted by the COVID-19 aftermath, but it remains optimistic that management’s action plans “are solid and will gain traction during FY 2023 as monthly business reviews mature.”

Fiscal 2022 was marked by a series of financial losses for the health system, including a $34.2 million operating loss compared to $16.1 million in net income a year earlier.

Care New England also experienced a wave of leadership changes over the past year. Its former CEO and President Dr. James Fanale retired on Dec. 1, and was replaced by Dr. Michael Wagner, former CEO and president of Tufts Medical Center.

Care New England recently hired Todd A. Conklin as its new chief financial officer and executive vice president. Conklin will take on the role effective Feb. 13, following Joseph Iannoni’s retirement on Jan. 31.

Lifespan Corp., the state’s largest health care system, has experienced a similar trend, with former CEO and president Timothy J. Babineau abruptly resigning earlier in the year, and John Fernandez, currently the president of Mass Eye and Ear and Mass General Brigham Integrated Care, set to step into that role. Lifespan also reported a troubling year financially for fiscal 2022, with a $77 million operating loss.

Claudia Chiappa is a PBN staff writer. You may contact her at Chiappa@PBN.com. 

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