Kaweah Health declining labor expenses point to signs of recovery

Visalia, Calif.-based Kaweah Health, whose CEO has pleaded for help to keep the health system alive, is seeing its contract labor expenses continue on a downward trend, according to a May 3 filing.

The health system, from a peak of $7.1 million for the month of August, saw fiscal third-quarter contract labor expenses of $7.6 million. Kaweah Health is forecasting such expenses in the final quarter of fiscal 2023 will be as low as $3.4 million.

The decrease in contract labor expense is mirrored in overall expenses for the health system, with third-quarter costs totaling $222.3 million. That figure compares with $237.2 million in the July-to-September period in 2022.

Employment expenses are "one of our largest areas of opportunity," Kaweah Health said in the filing. Labor costs, for example, have declined from 229 full-time equivalents to 100, with contract labor rates dropping by 50 percent.

Kaweah Health, which has a 613-bed capacity, still saw a lower operating loss totaling $2 million in its third quarter. Overall, Kaweah posted net income of almost $1 million in the quarter.

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