Presence Health in Chicago is struggling financially and has undertaken a series of austerity measures to try and avoid default on its debt, according to the Chicago Tribune.
The 11-hospital chain reported an operating loss of $186 million in 2015, up from $12.7 million in 2014, despite the fact that patient volumes were unchanged, according to the newspaper.
Last December, the system wrote off $53 million in patient bills as uncollectible because they had not been filed in a timely fashion with insurers and understated charges versus anticipated payments. It set aside another $44 million in reserves for medical malpractice suits.
Presence has undertaken a crash makeover of its finance that has included a rise in prices, improved collections and billing, and a cut in labor and supply expenses. The last was recently boosted by a plan to cut 250 jobs over the next three months, the Chicago Daily Herald has reported.
"We have, in our opinion, started to identify all the issues and are now in the fix-and-rebuild mode," Presence Chief Executive Officer Michael Englehart told bondholders during a conference call, the Tribune reported. "This issue is not about losing dramatic market share. It's about the execution, the one-time events and day-to-day operations."
Englehart took the top job at Presence last year. He has remade much of the senior management team since his appointment.
The system may have some challenges on improving patient collections, as data has shown that while cost-shifting to patients has increased in recent years, many do not have the means to pay those larger bills.
Closer discussions with patients can often yield improvements in this area, although Presence Health has not provided specific details as to how it plans to proceed on this front.
To learn more:
- read the Chicago Tribune article
- check out the Chicago Daily Herald article