Prime Healthcare Foundation, the nonprofit arm of Ontario, Calif.-based Prime Healthcare, had its positive outlook affirmed amid expectations operating performance "will recover in the 2023 fiscal year to a positive territory," Fitch Ratings said April 20.
The foundation, which operates 13 hospitals in six states as part of Prime Healthcare's overall 45-hospital network, had its default rating, and that on a series of $254 million of bonds, affirmed at "BBB."
PHF recorded an operating loss of $73 million in fiscal 2022 after two previous relatively healthy years. During the first quarter of 2023, there have been signs of a reduced reliance on contract labor, Fitch said, hence the positive outlook.
"Contract labor expense, which averaged $3.4 million through September 2022, is now reported at under $2 million per month," Fitch said in the research note.
Prime Healthcare's CFO said earlier this year the focus on reducing labor costs is across the entire network, with over 250 specific initiatives in place.
"These are primarily focused around the four pillars of managing labor costs: staff recruitment, staff retention, staffing management and contingency staffing," said Steve Aleman, CFO, in an interview with Becker's. "It's a matter of all hands on deck from the executive leadership at the top all the way to those who manage staffing on the hospital floors."