PROVIDENCE – Lifespan Corp. reported an operating income of $4.9 million in the first quarter ending on Dec. 31, starting fiscal year 2023 on a positive note after a bleak 2022.
The state’s largest hospital system released its quarterly bond reports Monday, showing improvements from a year ago, when Lifespan reported a $18.6 million operating loss for the first quarter of 2022.
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“We’re optimistic we’re going in the right direction but there’s challenges out there,” said Peter Markell, Lifespan’s new executive vice president and chief financial officer, during a press call on Tuesday. “We will see what the rest of the year brings.”
Lifespan also reported a net income of $15.3 million for the quarter, compared to a net loss of $13 million the year-prior.
“It’s a better quarter,” Markell said. “We need to do better going forward.”
Care New England Health System, which owns Women & Infants, Kent and Butler hospitals, in comparison, posted an operating loss of $13.8 million for the first quarter of 2023 and a net income of $1.34 million.
Lifespan – which operates five hospitals, including the state’s largest, Rhode Island Hospital – saw total revenues increase to $766 million from $690 million from the first quarter of 2022.
Total revenue increased partly thanks to an increase in patient service revenue, which went up by $45 million, compared to the same quarter a year ago. While volume levels were consistent with the same quarter in 2022, discharges and adjusted patient days both increased, resulting in a decrease in the average length of stay and in more patient service revenue. Occupancy rates, emergency department visits, clinic visits and ambulatory surgeries all increased, while inpatient surgeries declined.
During the quarter, Lifespan also recognized $6.5 million in Federal Emergency Management Agency funds.
Both Lifespan’s new president and chief executive officer John Fernandez and Markell said Lifespan is focused on keeping business local and continuously improving patient experience, both essential to keep patient volume stable and improve surgical numbers, which remain one of the best-paying services for hospitals.
“We want to capture the business and make sure it’s going nowhere else,” Markell said. “It’s about patient experience, getting people to say ‘of course I’m going to Lifespan.”
Total operating expenses also increased by $52.3 million in the first quarter of 2023, compared to the same period in 2022, going to $761 million from $709 million. This was due primarily to a $38.7 million increase in compensation and benefits and a $12.5 million increase in the cost of supplies and other expenses.
Looking forward, staffing remains the main challenge for the hospital system, that currently has more than 1,000 vacancies, said Markell, including 400-500 for nurses. So recruiting and retention strategies continue to be Lifespan’s main priority moving forward.
“We need to pull out all the stops when it comes to recruiting,” said Fernandez.
Total net assets of Lifespan increased by $42.6 million in the first quarter of 2023 compared to an increase of $6.2 million in the first quarter of 2022. But cash and cash equivalents declined to $141.8 million compared to $294.1 million the year prior, due primarily to the repayment of CMS advances and deferred FICA.
Lifespan’s positive quarter comes after a bleak 2022, where the hospital system closed the fiscal year with a $77 million operating loss and a $187.6 million net loss. It also comes amid a wave of leadership changes that reshaped much of the hospital group’s administration, including the appointments of Fernandez and Markell.
“We’re glad that [the first quarter] is good,” Fernandez said. “The goal is to figure out the strategy for the future.”
(Update: Comments from Markell and Fernandez added through out)
Claudia Chiappa is a PBN staff writer. You may contact her at Chiappa@PBN.com.
