Lifespan Reports FY 19 Financial Results
Lifespan today reported a loss of $55 million from operations without investment income in fiscal year 2019, which ended September 30, 2019. With investment income, loss from operations was close to $23 million. These results led to a net loss of $35 million for fiscal year 2019.
Lifespan’s 2019 financial results can be traced to several factors including, but not limited to: a dramatic and unexpected reduction in Medicare rates of nearly $25 million; a full year’s impact of Memorial Hospital closing, resulting in excessive demands on both The Miriam and Rhode Island hospital, creating throughput inefficiencies; a continuing deterioration in payor mix; and the continued steerage of tertiary care to Boston.
“While the fiscal year 2019 financial results are concerning, as Rhode Island’s largest and most preferred provider of health service, and the state’s largest employer, we are committed to regaining our financial viability,” said Dr. Timothy J. Babineau, president and CEO of Lifespan. “We have identified the factors that led to the losses, have set a goal of generating a positive outcome of $1 million in operational income, before investment income, for the year ending September 30, 2020, and have begun the process of achieving it. We have already implemented a number of improvement efforts including the engagement of Alvarez and Marsal (a nationally recognized healthcare consulting firm), an ongoing restructuring effort throughout the system and the announcement of a Voluntary Early Retirement Program (VERP) for eligible employees, which will go into effect on March 31, 2020.”
“Patients are relying increasingly on the Lifespan system to take care of all of their health needs,” Babineau added. “Rhode Island continues to be a very challenging environment for the health care industry. To succeed, we need to be agile, open to new ideas, and find innovative ways to provide high quality, compassionate care for more patients with less reimbursement. We are committed to doing just that.”