Becker's Hospital Review

18 CFO / FINANCE Physicians: Is CHS 'a slow- motion train wreck?' By Ayla Ellison I t has been nearly one year since Franklin, Tenn.-based Community Health Systems rejected a group of physicians' takeover bid for Lutheran Health Network in Fort Wayne, Ind. At that time, physicians said LHN was in dire need of upgrades to improve quality of care and patient experience. ose upgrades are still needed, a group of physician advocates wrote in a recent op-ed in e Journal Gazette. CHS became one of the largest for-profit hospital operators in the U.S. by acquiring smaller community hospitals. However, in an effort to improve its financial picture and pay down its debt, CHS has sold several hos- pitals in recent years and is working on addi- tional deals to divest facilities. e hospital sales have helped CHS lighten its debt load, but it is not clear whether the divesti- tures will generate enough funds to adequately reduce the company's total debt, wrote William Cast, MD; Matthew Sprunger, MD; and J. Phil- ip Tyndall, MD. "And so, is Community in recovery mode or is this a slow-motion train wreck? It is hard to tell," wrote the physicians. "Debt costs can limit hiring, and it is ultimately the ability to replace retiring nurses and physicians; the ability over time to train teams to practice safe processes; and the ability to provide all of the new equip- ment people require that underpin quality." e physicians noted there have been im- provements at LHN in the last year, including some equipment upgrades. However, they said more investments in infrastructure and people are needed. "Our scorecard reads that matter are not better and trending lower," wrote the physicians. CHS intends to invest a total of $500 million in LHN, including a possible new medical campus to replace St. Joseph Hospital in Fort Wayne. However, the physicians claim that isn't enough. In an op-ed published last August, the physicians said CHS would need to invest nearly $800 million "to correct its missteps and return LHN to form." n California hospital to close by mid-June, lay off 200 employees By Alyssa Rege C oalinga (Calif.) Regional Med- ical Center, which was estab- lished in 1928, will close on or before June 15, according to The Fresno Bee. Coalinga Regional Medical Center CEO Wayne C. Allen said the hospi- tal's board of directors voted April 30 to close the 24-bed facility along with its 99 skilled nursing beds, the report stated. Mr. Allen said in a May 1 state- ment some of the hospital's health- care services may close before the pending closure date. If that occurs, patients will be adequately notified. "During the last two years, it has be- come increasingly more difficult for a small community hospital to financial- ly survive. CRMC has struggled with multiple challenges and is no longer financially sustainable as an indepen- dent hospital. We have established a plan for the transfer of the healthcare of our patients to other neighboring medical providers," Mr. Allen said in the statement. "The hospital's board of directors acknowledges its appreciation to all employees and medical staff who have provided years and years of care and compassion to our patients," the statement continues. "This is a very sad time for our hospital family and the community we serve. We be- lieve access to quality healthcare in our local community is vital. For that reason, we have reached out to Com- munity Medical Centers in Fresno to discuss possible options to maintain certain outpatient services in Western Fresno County." Mr. Allen took the reins as CEO in April after the hospital's former CEO retired. The "devastating" closure comes after the hospital suffered 18 months of fi- nancial losses totaling $4.5 million, Mr. Allen told the The Fresno Bee. The closure will leave residents scram- bling for medical care, as the nearest hospital — Adventist Health Hanford (Calif.) — is roughly 40.8 miles away. The next closest hospitals are more than 60 miles away, according to the report. The hospital's 200 employees will also be laid off during the next 45 days, according to ABC30 Action News. n A royal baby is cheaper to deliver than the average US baby By Mackenzie Bean K ate Middleton, the Duchess of Cambridge, gave birth to a baby boy April 23. Surprisingly, delivering the new prince, who is now fifth in line to the British throne, likely cost less than the average U.S. delivery, ac- cording to The Economist. The Duchess gave birth at the Lindo Wing, a private, upscale maternity ward in London often used by royals. In 2015, the maternity ward charged £5,670 — or $8,900 — for a non-caesarean delivery and a 24-hour stay in a deluxe patient room, according to data from London-based St. Mary's Hospital, which houses the Lindo Wing. In contrast, the average fee for the same delivery in the U.S. was $10,808 in 2015, according to The International Federation of Health Plans. When accounting for pre- and postnatal care, this figure jumps to about $30,000. Although insurance will cover most of this cost, parents are still left with an average bill of about $3,000, according to Truven Health Analytics data cited by The Economist. n

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