PROVIDENCE – Care New England Health System announced fiscal third-quarter operating income of $7.4 million, a gain of $6.5 million from the same 2018 period. So far through the nine-month period ended June 30, CNE has posted operating income of $2.3 million, compared with total operating losses over the previous three fiscal years of $142.3 million.
This year’s fiscal third quarter also reflects a $13.2 million improvement over the second quarter, when, according to CNE CEO and President Dr. James E. Fanale in an interview with Providence Business News, an unexpected decline in birth rates at Women & Infants Hospital contributed heavily to an operating loss of $5.8 million.
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Until June, CNE appeared to be positioned for an acquisition by Brigham and Women’s Hospital, which is owned by Partners Healthcare of Massachusetts. Brigham pulled its merger application, though, when Gov. Gina M. Raimondo intervened and asked CNE, Lifespan Corp. and Brown University to reach agreement on a unified in-state health care system.
CNE pulled out of the talks six weeks later. Fanale, however, said that its fiscal third-quarter numbers are a sign that the system is managing well on its own.
Citing “focused management, detail to action planning and strong operational execution,” Fanale called the results a “tremendous success.”
“While this is a significant accomplishment, it must be emphasized that in order to continue this positive momentum, our perseverance and dedication must be sustained,” he said.
Care New England reported revised fiscal first-quarter operating income of $722,931, compared with the operating loss of $5.8 million during the second quarter.
The network reported operating losses of $26.9 million in fiscal 2018, $47.1 million in fiscal 2017 and $68.3 million in fiscal 2016, largely due to expenses from Memorial Hospital of Rhode Island. CNE closed the hospital at the beginning of 2018, but the building still houses walk-in clinics and other ambulatory care centers.
During the interview earlier this month, Fanale said that CNE plans to sell a portion of the Memorial campus to a developer. Until a deal is signed, though, the system is still responsible for maintenance costs for the building, which has accounted for $1 million in restructuring costs. Excluding Memorial, operating income to date has totaled $4.9 million for the system, compared with $2.3 million year to date in fiscal 2019.
Long-term debt over the year declined to $170.4 million from $176.3 million in the third quarter of fiscal 2018. Cash and cash equivalents at the end of the period totaled $75 million, a 40.4% increase year over year.
In addition to falling birth rates, declines at the neonatal intensive care unit and Women & Infants, and medical and surgical units pose the biggest challenges this year, CNE spokesman Jim Beardsworth said in a news release.
Elizabeth Graham is a PBN staff writer. She can be reached at Graham@PBN.com.
