Catholic Health Initiatives (CHI) just published its financial report for the first quarter of Fiscal Year 2018– the three months ending Sept 31, 2017. One initial media report led with what CHI would no doubt wish to emphasize, that the company has cut its “quarterly operating loss by more than half.” The actual reported system-wide loss from operations in Q1-FY2018 was $77.9 million compared to a loss of $180.7 million in Q1-FY2017. This change is being attributed chiefly to more efficient purchasing and to decreased labor costs. Indeed, CHI reported a decrease of 2,667 full-time-equivalent employees over the quarter. Whether such cuts are healthy for the company in the long run remains to be seen. I await more expert financial analysis than I am able to offer and to see how the financial markets or potential new partners or asset-purchasers react. It appears these latter are not being hasty. As I plow through the numbers, I see many other measures going in what appear to me to be the wrong directions.
The report gives special attention to what has been going on here in Kentucky. [I extracted all mentions of Louisville or Kentucky from the 61-page report into a separate document available here.] The percent of operating revenues contributed from the Kentucky Region was 7.5% this last quarter compared with 16.2% in 2013. This represents a drop from 2d place to 5th place among the 11 or 12 regions or operational segments. Perhaps the most newsworthy item is the first notice of which I am aware that the anticipated (hoped for?) date for a closing on the sale of CHI’s KentuckyOne Health facilities in Louisville has been put off six months to June 30, 2018. A reasonable person might conclude that KentuckyOne is having a difficult time finding a motivated buyer for its hospitals, outpatient medical centers, and physician practices here in Louisville. I am not surprised. The return of control of University of Louisville Hospital to the University has not improved the financial performance of Jewish/Sts Mary & Elizabeth Hospitals. With respect to apparently continuing discussions between CHI and Dignity Health to align their activities, the report uses the same language it did at the beginning of this year. No substantive indication is given as to how things are going. Although some media reports use the word “merger” to describe the process, that word seems to be carefully omitted in accounts by CHI itself. Continue reading “How Close Really Is KentuckyOne Health To Selling Its Louisville Assets?”