Becker's Hospital Review

24 CFO / FINANCE M Health Fairview to lay off 900, close hospital ED By Alia Paavola C iting a need to offset financial losses, Minneapolis-based M Health Fairview said it plans to downsize its hospital and clinic operations and reduce its workforce by 900, according to the StarTribune. M Health Fariview said Oct. 5 it would close 16 of its 56 clinics in Minnesota and Wisconsin; shut down its 90-bed Bethesda Rehabil- itation Hospital in St. Paul, Minn.; and stop offering some services at St. Paul-based St. Joseph's Hospital. e health system said it will close St. Joseph's emergency depart- ment by the end of the year, and specialties such as neurology and bariatrics will be moved to other facilities. e hospital said it will offer inpatient mental health services through 2021. As a result of the changes, 900 employees, or about 3 percent of its 34,000-person workforce, will be laid off. M Health Fairview said that the affected employees can apply for other jobs within the health system, according to the Pioneer Press. e system said the changes were necessary because it is bracing for a $250 million operating loss this year, exacerbated by the pan- demic. "A loss of a quarter-billion dollars is not something we can sustain,"- James Hereford, M Health Fairview's CEO, told the StarTribune. Mr. Hereford said that COVID-19 "accelerated" the timing of the cuts, but several market and industry-related trends were already determining the direction of the changes. M Health Fairview's Bethesda Rehab Hospital, which was convert- ed in March to serve high-risk COVID-19 patients, is likely to be- come a shelter for the homeless to be run by the county, according to the Pioneer Press. rough 2021, Bethesda's designated COVID-19 beds will be trans- ferred to St. Joseph's Hospital, according to the Pioneer Press. n Investors extracted $400M from hospital chain that couldn't afford supplies By Ayla Ellison L eonard Green & Partners, a private equity firm, has taken $400 million in dividends and fees for itself and investors in the decade since it bought a controlling stake in Los Angeles-based Prospect Medical Holdings, ac- cording to ProPublica. According to ProPublica, the private equity firm extracted the dividends by loading Prospect up with debt, not from profits. While the owners of Prospect have taken home millions — the CEO made $128 million while the company expanded from five to 17 hospitals — its hospitals have been plagued by safety issues and sometimes couldn't afford supplies, ac- cording to the report. "Say we need 4x4 sponges, dressing for a patient, IV fluids … we might not have it on the shelf because it's on 'credit hold' because they haven't paid their creditors," Leslie Heygood, a registered nurse at one of Prospect's Pennsylvania hospitals, told ProPublica. The federal government's quality of care assessment ranks all but one of Prospect's hospitals below average, and Pros- pect hospitals have been deemed by CMS to pose "immedi- ate jeopardy" to their patients 14 times in the past decade, according to the report. Leonard Green & Partners and Prospect declined ProPubli- ca's request for interviews. They did send written statements through a PR firm, saying they provide good patient care, have abided by the law and invested hundreds of millions in their hospitals. "Prospect Medical Holdings is a healthcare system that pro- vides compassionate, accessible, quality healthcare and physician services," according to the statement provided to ProPublica. n 3 top drivers of healthcare spending in the US By Ayla Ellison T he U.S. spent nearly twice as much per capita on healthcare as comparable countries in 2018, accord- ing to a Peterson-Kaiser Tracker analysis published Sept. 25. Here are three of the top drivers of U.S. healthcare spend- ing, according to the analysis. 1. Inpatient and outpatient care was the largest category of healthcare spending in both the U.S. and comparable coun- tries. This category includes payments to hospitals, clinics and physicians. Americans spent $6,624 per person on inpatient and outpatient care while comparable countries spent $2,718 on average. 2. Prescription drugs cost more in the U.S. than in compa- rable countries, according to the analysis. The U.S. spent $1,397 per capita on prescription drugs and other medical goods in 2018, and comparable countries spent $885 per capita on average. 3. Spending on health administration was four times more per person in the U.S than in comparable countries. For the analysis, administrative costs included spending on overhead from insurers and running governmental health programs but excluded administrative expenditures from healthcare providers. n

• Cover