CNE reports $39M loss in first half of fiscal 2017

PROVIDENCE – Care New England reported a $39 million loss in the first half of the fiscal year, including $26 million in the second quarter alone, the health care system said this week.

The company, in a statement from spokesman James Beardsworth, said the quarterly financial report highlights “the significant challenges we continue to address at Care New England.”

Beardsworth said CNE has been candid about the health care system’s financial woes, including declines in patient volume, a worsening payer mix, changing health care needs, and “extremely restrictive reimbursement caps” set by the state Health Insurance Commissioner.

He noted that there are fewer sick and premature infants. He called that “great news,” but noted that it also creates a “significant” financial problem under the system’s current payment model.

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The $39 million loss includes a loss of nearly $12 million at Memorial Hospital in Pawtucket, as well as one-time system restructuring costs of $58 million.

“While we continue to make important progress, it takes time for such results to ultimately be seen on the bottom line. We are very confident through our ongoing and diligent efforts, along with exciting new partnership opportunities for the system, that we will continue to move forward focused on providing the best possible care for our patients and community,” Beardsworth said.

Last month, CNE announced it signed a letter of intent to join Boston-based Partners HealthCare System of Massachusetts. Partners had approximately $12 billion in revenue last year.

Talks between the two health systems picked up after a proposal to merge CNE and Southcoast Health System Inc. collapsed last year.

Meanwhile, CNE plans to sell the cash-strapped Memorial to Prime Healthcare Foundation.

A week after the Partners news, CNE announced staff layoffs due to financial challenges. CNE did not release an exact number of staff cuts, other than saying the majority of full-time layoffs occurred at Women & Infants Hospital, while reductions also took place at Kent and Butler hospitals and VNA of Care New England. A union representative said Women & Infants management told the union it will try to layoff fewer than seven union workers.

Lori Stabile is the PBN Web Editor.