PROVIDENCE – Care New England’s fiscal 2018 second-quarter report shows a $7 million operating loss including the shuttered, financially troubled Memorial Hospital of Rhode Island in Pawtucket, but a $4.4 million operational gain without it, following a first-quarter operating loss of $33.7 million, a sign of an effective turnaround in action, said Dr. James E. Fanale, president and CEO.
Memorial, closed in January 2018, withdrew from what the company calls the Obligated Group on Dec. 22, 2017. The Obligated Group includes Care New England Corporate, Integra Community Care Network LLC, Butler Hospital and related affiliates, Kent Hospital and related affiliates, Women & Infants Corp. and related affiliates, VNA of Care New England and related affiliates, Southeastern Healthcare System and related affiliates, and The Providence Center Inc. and related affiliates.
The company’s Consolidated Group, which includes Memorial, showed a loss from operations of $40.7 million for the six-month period ended March 31. Of that loss, $37.8 million was attributable to Memorial Hospital, according to Care New England, with $4.3 million produced by the Obligated Group. Consolidated CNE losses for the period include the Memorial losses before and after the withdrawal from the Obligated Group and a one-time, non-cash loss on asset impairment of $22.2 million for the value of Memorial Hospital.
Total revenue and gains for the quarter totaled $271.6 million, a 1.2 percent decline from the same fiscal 2017 period. At the same time, the Consolidated Group posted a $6.4 million decrease in unrestricted net assets, a $9.2 million improvement over the year.
For the six months of the fiscal year, total revenue and gains for CNE totaled 549.7 million, slightly more than the $549.3 million in the same previous-year period. Thanks in large measure to a pension settlement expense of $29.5 million, however, the health care provider posted a decrease in unrestricted net assets for the six-month period of $63.6 million, compared with a decrease of $27.5 million a year earlier.
Fanale said losses from Memorial will continue to diminish as Care New England proceeds without the financially challenged institution. He credited work on growth initiatives and cost management in aiding the company’s turnaround.
The hospital system will continue to focus on growth, care retention, access and cost savings, he said. Some of the cost savings were realized in labor management, medical supplies and drugs, and other purchased services, Fanale said.
“These results, coupled with the successful turnaround that is taking shape across the system, is a testament to the dedication and hard work of everyone at CNE. We are extremely optimistic about our current position and the partnership opportunities in which we are now actively engaged.”
Charity care for the system in the second quarter fell 1.9 percent to $4.4 million. Through the first six months of fiscal 2018, it has fallen 14.8 percent to $7.4 million. Provision for bad debt in the first quarter fell 34.3 percent to $7.4 million and 22.8 percent year to date to $15.5 million.
In January, CNE and Partners Healthcare of Massachusetts entered a definitive agreement to merge, the latest step in the Bay State company’s effort to acquire the Rhode Island hospital system.
