Release Date: 05/11/2018
Obligated Group Achieves $4.4 Million Gain in Q2 Represents Significant Financial Performance Improvement from Previous Year
Care New England Health System (CNE) announced today that for the FY 2018 second quarter (January 2018-March 2018) its Obligated Group (CNE excluding Memorial Hospital) achieved income from operations of $4.4 million versus the prior year loss of $26 million.
Memorial Hospital, which closed in January 2018, withdrew from the Obligated Group on December 22, 2017.
For the six months ending March 2018, the Obligated Group posted a loss from operations of $4.3 million. More than 100 percent of this total loss was attributable to Memorial Hospital which experienced a loss of $8.5 million during this period.
“Today’s reporting represents important and significant progress in CNE’s efforts to dramatically improve its financial performance,” said James E. Fanale, MD, president and CEO, CNE. “While we continue to experience some significant loss associated with Memorial Hospital, we are experiencing tremendous results otherwise. While we expect these losses associated with Memorial to continue at a declining rate through the fiscal year, we now can see to a point in the near future where those losses will end due to the closure of the facility that took place in January. These results, coupled with the successful turnaround that is taking shape across the system, is a testament to the dedication and hard work of everyone at CNE. We are extremely optimistic about our current position and the partnership opportunities in which we are now actively engaged.”
The successful implementation of growth initiatives and cost management has been very effective in achieving the results to date. Action plan tracking, daily productivity monitoring, and revenue cycle improvements are making an impact on performance. Management plans to continue to implement more initiatives targeting growth, care retention, access, and cost savings, to further strengthen CNE’s position are among the efforts in place. Specific cost savings efforts in the areas of labor management, medical supplies and drugs, and other purchased services also yielded positive results.
On a consolidated basis, CNE including Memorial experienced a net loss from operations of $7.0 million for the second quarter of FY2018 and $40.7 million for the six months ended March 31, 2018. More than 100% of the total loss in both the second quarter and thorough the first six months of FY2017 was attributable to Memorial Hospital which experienced a loss of $12.3 million and $46.2 million, respectively. Consolidated CNE losses include the Memorial losses before and after the December 22, 2017 withdrawal from the Obligated Group and a one-time, non-cash loss on asset impairment at Memorial Hospital. For the first two fiscal quarters of 2018, CNE’s financial performance has improved more than $29 million from the same period last year.
For informational purposes the CNE Obligated Group is comprised of: Care New England Corporate, Integra Community Care Network, LLC, Butler Hospital and related affiliates, Kent Hospital and related affiliates, Women & Infants Corporation and related affiliates, VNA of Care New England and related affiliates, Southeastern Healthcare System and related affiliates (excluding Memorial Hospital of Rhode Island and affiliates), The Providence Center, Inc. and related affiliates.