Two Massachusetts health systems trimmed second-quarter operating losses under the leadership of new CFOs, while the new CFO at a Missouri system aims to bolster margins and meet growth goals in fiscal 2025.
Cindy Rios was appointed executive vice president and CFO of Cambridge, Mass.-based Beth Israel Lahey Health in December after previously holding the role in an interim capacity.
In the second quarter, Beth Israel Lahey reported a $23.3 million operating loss (-1% margin), improving on a $15.3 million loss (-0.8% margin) in the same period in 2023. Revenue for the quarter increased 14.9% year over year to $2.29 billion while expenses rose 11.3% to $2.31 billion. Net income for the quarter was $28.9 million, versus $1.8 million in the prior-year period.
Beth Israel Lahey recently implemented a new budget system, a decision-support system and an enterprise resource-planning system as well as installing the first phase of Epic's EHR system. Phase 2 is coming in October and the last phase will be implemented in the next fiscal year.
"The focus, once we implement this infrastructure, is then to take that and push the needle further on ChatGPT, AI," CFO Cyndy Rios told Becker's. "For the revenue cycle specifically, we want to get to the point where we're leveraging bots. We need to first implement the infrastructure and give ourselves a solution that we leverage across the system so that we can then build that next level. We can't take off until the basic platforms are in place."
Andrew DeVoe, former CFO of Cincinnati-based TriHealth, took over as CFO of Tufts Medicine in mid-February.
While the Boston-based system reported a $40.7 million operating loss (-7.9% margin) for the three months ended June 30, the results are a notable improvement on the $61.9 million loss (-9.6% margin) reported in the same period in 2023. Revenue for the quarter increased 0.8% year over year to $636.6 million while expenses grew by 3.5% to $721.9 million. Salaries and wages decreased 0.5% to $317.9 million and employee benefits increased 3.3% to $71.6 million
"I often refer to contract labor, the travelers, as a cancer to the organization. The sooner you can eliminate contract labor, the better you're going to improve quality, reduce cost and improve morale. That's probably the single biggest thing that you can do," Mr. DeVoe told Becker's. "You also need to make sure that you're minimizing the amount of overhead that you're burdening the entities [with]. You need to be as efficient as possible in delivering supply chain, revenue cycle, and IT. When you put a system together, one of the primary benefits of that is you gain some scale. If you're not achieving that scale, you're probably defeating the goals of coming together as a system."
In June, Greg Damron took over as CFO of Columbia-based University of Missouri Health Care. Mr. Damron stepped into the role at the tail end of the system's fiscal year, but has teed up a specific strategic plan to meet its growth goals in fiscal 2025.
"Over the next year, we're going to build off the work that was done in the past year around looking at cost and revenue opportunities," Mr. Damron told Becker's. "[We're] putting together multidisciplinary teams to go after opportunities around the organization to make some room financially. We've got a couple opportunities in the next year or so for payer renegotiation, so we will be assessing our positioning there."
MU Health Care reported an operating income of $49.3 million (2.8% margin) for the fiscal year ending June 30, improving on the $34.7 million gain (2.1% margin) reported in the previous fiscal year. Revenue increased 6.1% year over year to $1.75 billion while expenses rose 5.3% to $1.7 billion. Salary and wages expenses increased 0.9% year over year to $579.9 million and employee benefits costs increased 15.6% to $167.8 million.