Allina Health and Fairview Health Services — both based in Minneapolis — reported operating losses in the first quarter of the year, the Star Tribune reported May 17.
Allina saw a $101.6 million operating loss on $1.25 billion in revenue during the first three months of the year, citing labor costs and patient discharge challenges amid a lack of capacity at nursing homes and long-term care facilities. The health system, which operates 10 hospitals, reported a $25 million operating loss over the same period last year.
"Much of this we can't control; it's outside of our walls," Allina CFO Ric Magnuson told the Star Tribune. "I've never seen the cumulative effects from many different impacts — whether it's the labor side, whether it's the disruption on the volume side — to the industry like we're seeing right now. All of that is coming together in not a sustainable way."
The same factors contributed to an $87 million operating loss on $1.74 billion in revenue at Fairview during the first quarter, a slight improvement year over year.
News of the health systems' first-quarter results come as nurses and hospitals in the state spar over the Keeping Nurses at the Bedside Act, which would require hospitals to form nurse staffing committees to set staffing levels. Hospital leaders fear the legislation would exacerbate financial challenges and workforce strain, while nurses unions say the bill is a strong approach to bolster staffing and patient safety.
Meanwhile, Fairview is optimistic about its proposed merger with Sioux Falls, S.D.-based Sanford Health, CEO James Hereford told the news outlet. The controversial merger is set to close at the end of the month, though it has been complicated by opposition from the University of Minnesota (Fairview owns the university's medical center) as well as by legislative efforts that would give the state's attorney general more oversight.