Issue link: https://beckershealthcare.uberflip.com/i/1169964
25 CFO / FINANCE Quorum's net loss shrinks to $16.9M in Q2 By Ayla Ellison Q uorum Health's revenue declined year over year in the second quarter ended June 30. As a result, the Brentwood, Tenn.-based hospital operator ended the second quarter with a net loss. The 26-hospital system, a spinoff of Franklin, Tenn.-based Community Health Systems, said operating revenues de- clined 6.4 percent year over year to $442.2 million in the second quarter of 2019. Same-facility net patient revenues declined 2.6 percent year over year. Quorum said the decrease in same-facility net revenues was partially attributable to a decline patient volumes and lower revenues at Watsonville (Calif.) Community Hospi- tal and MetroSouth Medical Center in Blue Island, Ill. In June, Quorum signed a definitive agreement to sell 106- bed Watsonville Community Hospital. The company plans to close 314-bed MetroSouth Medical Center by the end of the third quarter. After factoring in expenses and one-time charges, Quorum ended the second quarter of 2019 with a net loss of $16.9 million, compared to a net loss of $26.6 million in the same period a year earlier. n California hospital set to emerge from bankruptcy after 2 years By Ayla Ellison A U.S. bankruptcy court approved Tulare (Calif.) Lo- cal Health Care District's Chapter 9 plan on Aug. 16. The district, which includes a 101-bed hospi- tal, is now set to emerge from the bankruptcy process, according to The Porterville Recorder. Tulare Regional Medical Center, the district's hospital, entered Chapter 9 bankruptcy in 2017 and closed for a year. The hospital reopened in October 2018 and en- tered into a lease agreement with Roseville, Calif.-based Adventist Health. The hospital, now called Adventist Health Tulare, recently opened a birth center and plans to add a sleep lab and mammography services. Adventist Health Tulare President Randy Dodd is pleased the court approved the healthcare district's bankruptcy plan. "This is the resolution we have all been hoping for," he said, according to The Porterville Recorder. "The part- nership we began with Tulare in 2018 is a perfect fit with Adventist Health's commitment and service to the Cen- tral Valley. We are glad to be able to extend our excel- lent healthcare system to this underserved market." n Hospitals can expect to spend 4.57% more on drugs in 2020 By Alia Paavola I ncluding inpatient and outpatient envi- ronments, hospitals and health systems can expect a 4.57 percent increase in phar- maceutical spending next year, according to Vizient's July 2019 drug price forecast. e forecast is an analysis and projection of anticipated trends in drug pricing based on the purchasing patterns of Vizient's member organizations, including pediatric facilities, community hospitals, nonacute settings and academic medical centers. Vizient's member organizations have a total of $67 billion in drug spend. Vizient is a healthcare perfor- mance improvement company. Five more takeaways from the report: 1. Specialty drug prices will continue to rise. Specialty drug price inflation is predicted to be 4.23 percent in 2020. Specialty drugs expenses tend to cost more than nonspecialty drug expenses. 2. e adoption of biosimilars will become vital to combat costs of biologics. Biologic agents, including those used to treat cancer and other chronic diseases, still dominate spend for hospitals. However, the FDA approved 22 biosimilars as of July 2019, and seven are available in the U.S. market. Adoption of these biosimilars and their entry into the market will help lower the cost of biologics. 3. Patents protecting some key biologics are set to expire this year. Patents for rit- uximab, bevacizumab and trastuzumab are expected to expire during the third quar- ter of 2019. These biologics account for more than $10 billion in spend in the U.S. healthcare system. 4. Drug shortages will continue and will contribute to higher costs. Vizient conducted a separate survey in April to understand the effect of drug shortages on its member hospitals. The survey revealed that drug shortages are costing U.S. hospitals at least $359 million a year on labor costs alone. Vizient expects supply challenges in the immune globulin intravenous market to continue for the remainder of the year into the first half of next year. Frequent and extended drug shortages increase spending on drugs purchased from wholesalers the hospital is not contracted with or on alternative medications. 5. Health system-owned specialty phar- macies will expand. Between 2015 and 2018, the number of specialty pharmacies owned by provider organizations jumped from 11 percent to 27 percent. Another analysis expects this will increase to 85 percent in 2022. n