St. Louis-based Catholic health giant Ascension is ramping up efforts to retool its care delivery strategy to trim its losses, making cuts to its inpatient offerings while pushing more resources to ambulatory settings.
In recent months, Ascension indicated its intent to pursue a new strategic direction in response to competition from nontraditional sites of care and mounting cost pressures. That decision put an end to merger talks with Providence St. Joseph Health in March that would have created the nation’s largest hospital operator and appears to have shifted the company’s focus from expansion to contraction.
The St. Louis Post-Dispatch reported Ascension has already trimmed $400 million in costs from its administrative offices, with another $65 million of cuts planned by July 1. All of the streamlining aims toward a focus on partnering with other organizations to provide care more efficiently.
“The mindset has to change from inpatient care to: How do we move away from our campuses and move into the community and move into settings that are easier to access, cheaper, quicker and have the same quality and safety and outcome standards?” said Tony Tersigni, CEO of Ascension.
According to the Post-Dispatch, that will mean more emphasis on nonhospital sites of care such as urgent care centers. Other notable goals outlined by the company include reducing clinical variance and mitigating disparities in healthcare outcomes.
Ascension Wisconsin announced this week it would be cutting nonessential services at St. Joseph Hospital in northern Milwaukee. Emergency, obstetric and neonatal intensive care units will remain open, but others will close in a bid to stem financial losses, which totaled $81.9 million between fiscal 2012 and 2016, reported the Milwaukee Journal Sentinel.
Ascension’s two-stage plan calls for partner organizations to come in and use the newly available hospital space to address healthcare needs for the local community.
Another Ascension-owned hospital, Providence Health System in Washington, D.C., announced plans last fall to scale back certain inpatient departments including obstetrics and inpatient behavioral health after announcing plans to redevelop their campus into a "health village," the Washington Business Journal reported. They cited an overabundance of local inpatient beds for the move.