KentuckyOne Health loses $69 million in fiscal year as management eyes turnaround
CHI chalks up KentuckyOne's financial struggles to factors such as “a challenging statewide health care environment” in Kentucky. The report says CHI has appointed “an enterprise multi-disciplinary executive team” to help KentuckyOne focus on growth, revenue and expenses.
“Numerous opportunities are projected to yield substantial financial improvement in each of these three areas and are being aggressively implemented to ensure success and sustainability,” CHI says in the report. “This effort remains a high priority for management as KentuckyOne Health focuses on significantly improving its financial results.”
The latest report from Denver-based CHI captures only about three months of results following KentuckyOne's move in February to eliminate about 700 jobs. The layoffs were “one of the major initiatives” to come out of the financial turnaround efforts of the special executive team, CHI says in the latest report.
At the time of the layoffs, KentuckyOne Health CEO Ruth Brinkley said the organization had to improve its performance by $218 million for fiscal year that ends June 30, 2015. KentuckyOne spokeswoman Barbara Mackovic said Thursday the organization “remain(s) on track” to meet that goal and “the month-to-month trend of our financial performance is encouraging.”
Formed in 2012, KentuckyOne includes the Louisville-based Jewish Hospital & St. Mary's HealthCare; the Lexington-based Saint Joseph Health System; and essentially all of University Hospital and the James Graham Brown Cancer Center through a long-term partnership with the University of Louisville.
“KentuckyOne has always acknowledged that our integration as the largest health system in the Commonwealth is a journey. The information in the CHI report ending June 2014 reflects that journey,” Mackovic said in an emailed response.
KentuckyOne accounted for about 16 percent of CHI's total revenue of about $14.3 billion in the year ended June 30, 2014, according to the report.
One area where KentuckyOne hopes to glean savings is in the downtown Louisville facilities it controls such as University Hospital and Jewish Hospital.
“(A) major emphasis is being placed on integration of services across the Downtown Louisville Medical Campus, in order to improve clinical programs and eliminate duplication and services,” CHI says in the report.
KentuckyOne's financial condition isn't preventing it from investing in facilities and programs.
Last week, KentuckyOne said it would spend $9 million upgrading and expanding the emergency room at Sts. Mary and Elizabeth Hospital in south Louisville.
Mackovic added that KentuckyOne has purchased land in Shelby County for “a new facility to meet the evolving needs of the community” – exact plans are not finalized – and that it recently completed a $1 million expansion and renovation of the Breast Care Center at Saint Joseph East in Lexington.
KentuckyOne also continues to invest in its partnership with U of L “to meet a wide range of programs and services at the downtown Louisville campus,” she said.
WDRB previously reported that KentuckyOne lost about $100 million the last six months of 2013 and $134 million in the nine months ended March 31, 2014. Those figures include the impact of financial expenses such as interest, depreciation and amortization. CHI did not disclose a comparable figure for KentuckyOne in the latest report covering the year ended June 30.
The $69 million loss it reported for KentuckyOne -- before factoring in financial expenses – widened from $24.2 million for the six months ended Dec. 31, 2013.
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