Catholic Health Initiatives, a nonprofit 103-hospital system based in Englewood, Colo., has made various efforts in recent months to reduce expenses amid financial losses.
Here are seven takeaways on CHI's financial situation and improvement endeavors.
1. In November 2016, S&P Global Ratings placed the "A-" long-term and underlying ratings issued for CHI's debt on CreditWatch with negative implications.
"The CreditWatch placement reflects our receipt of CHI's fiscal year-end statements and commentary, which combined with other non-financial factors is reflective of continued ongoing financial and operational problems," said S&P analyst Martin Arrick. "While some progress has been made on CHI's improvement plan, some slippage is also evident."
2. CHI recorded an operating loss of $483.3 million in fiscal year 2016, compared to an operating surplus of $23.9 million in the year prior. "Lower patient volumes, higher labor costs, increased pharmacy prices and reduced reimbursement in Medicare and Medicaid all contributed to CHI's financial performance in the 2016 fiscal year," the system said in a written statement in November.
3. CHI reported an operating loss of $217.8 million in the first quarter of FY 2017, compared to an operating surplus of $7.8 million in the year prior. CHI said the operating loss was driven by operations in four regions — Colorado, Kentucky, Nebraska and Texas. Before restructuring, impairment and other losses, the combined operating EBIDA for those four regions was down $108 million in the first quarter of FY 2017 compared to the same period of the year prior.
4. Last month, The CHI Texas Division, based in Houston, announced plans to eliminate 346 positions across its statewide network comprising 17 hospitals. The cuts in Texas are part of CHI's efforts to reduce expenses in markets across the enterprise.
"Like all health systems, Catholic Health Initiatives continually reviews its operating and financial performance to determine how best to meet and serve the needs of our patients and communities while maintaining a strong financial foundation for the future," CHI said in a statement in January. "Due to operating losses resulting from regulatory changes and external economic and environmental factors in the rapidly changing healthcare industry, CHI has been forced to make difficult choices in reducing expenses, including the elimination of some jobs in markets across the enterprise."
5. Earlier this year, CHI St. Alexius Health in Bismarck, N.D., laid off 52 employees, or 2.7 percent of its total workforce, amid rising costs.
6. CHI's efforts to improve its financial picture also include a systemwide hiring freeze and a mandate to all regions to cut costs, reports The Bismarck Tribune.
7. CHI officials expect financial performance to improve in FY 2017.
"CHI is focused on several key areas for increased efficiency and expense reduction — including labor, supply chain, administrative overhead, revenue cycle and pharmacy services," the system said in a statement in November. "We are confident these efforts will yield substantial improvement in overall operating and financial performance as we progress through the current fiscal year."