Marshfield (Wis.) Clinic Health System failed to meet its debt service obligations for the fiscal year ending Dec. 31 and was required to hire a consultant to recommend improvements as a result.
Initial conclusions have now been made pointing to a possible $185 million in annual cost savings across three areas for the 11-hospital system, a May 26 filing showed.
The potential savings are in the areas of revenue cycle management, labor costs and physician productivity linked to length of stay numbers, the report showed.
"Further consideration should be given to reducing staffing levels in revenue-producing departments and revenue cycle management departments," according to the report discussing labor expenses. "Additional cost reduction opportunities may exist in employee benefits and should be assessed."
Both labor costs and revenue cycle efficiencies compare unfavorably with peer health systems, the report said.
Potential labor savings could total $70 million, revenue cycle management improvements $55 million and physician productivity $60 million, according to the report.
Marshfield Clinic, which is on track to merge with Duluth, Minn.-based Essentia Health, has said it will have any debt service waived for the first quarter of 2023. The system has also made significant job cuts and had credit ratings downgraded in recent weeks.