Becker's Hospital Review

7 CFO / FINANCE CommonSpirit consolidates regional divisions, reviews portfolio By Nick Thomas C hicago-based CommonSpirit, one of the largest nonprofit health systems in the country, is undergoing a "comprehensive portfolio review" as it reorganizes into fewer geographical regions, its CFO told an investor call Oct. 12. e system, which operates 142 hospitals across the country, is aiming to restructure its geographical split into just five regions rather than the current eight, Dan Morissette, CFO, said on the call. e system remains "committed to its current markets," he added. e news follows restructuring over multiple divisions in recent months including the merging of all the system's California hospital operations into one mega-division. Of its current regions, three were particularly underperforming in fiscal 2023, namely the Pacific Northwest, the Southeast and Texas, which reported EBIDA losses of $106 million, $163 million and $208 million, respectively, in the year ending June 30. Specific focus points to help improve the situations in each of those regions include length-of-stay issues in the Pacific Northwest and reducing costs and expanding ambulatory care in Texas, John Petersdorf, senior vice president of operational finance, said on the call. In the Southeast, meanwhile, the focus would be on expanding ambulatory services and there were "significant opportunities" in Tennessee and Kentucky, Mr. Petersdorf added. Behavioral health and non-acute services could be a specific focus for CommonSpirit going forward in terms of potential merger and acquisition, Mr. Morissette said. "It is a comprehensive portfolio review," he said. "We are certainly all ears. ere is a very intentional focus on each geographical market." CommonSpirit reported an operating loss of $1.39 billion for the 2023 fiscal year on revenue of $34.51 billion. ere was a "marked" improvement in the fourth quarter, something the system is aiming to build on in fiscal 2024, Mr. Petersdorf said on the call. CommonSpirit has not yet responded to a request for comment and more detail. n California to raise minimum wage to $25 an hour for healthcare workers By Kelly Gooch C alifornia Gov. Gavin Newsom has signed a bill that will gradually raise healthcare workers' hourly minimum wage to $25. The bill, signed Oct. 13, comes after union and hospital representatives reached agreement on how such a minimum wage could be addressed. "Gov. Newsom's signature on landmark legislation to improve wages for California's healthcare workers will create meaningful change for families struggling to keep pace while at the same time protecting access to care in vulnerable communities," Carmela Coyle, president and CEO of the California Hospital Association, said in a statement shared with Becker's. "This bill strikes the right balance between significantly improving wages while protecting jobs and safeguarding care at community hospitals throughout the state." Under the new law, cities and counties are blocked from increasing pay via ballot measures for 10 years. Workers at healthcare facilities with 10,000 or more full- time equivalent employees will earn $23 per hour starting in 2024, with pay increasing to $24 an hour in 2025 and $25 an hour in 2026. That affects workers including launderers and hospital gift shop workers, according to the Los Angeles Times. Workers at hospitals with a high governmental payer mix; independent hospitals with an elevated governmental payer mix; rural independent covered healthcare facilities; or covered healthcare facilities owned, affiliated or operated by a county with a population of less than 250,000 as of Jan. 1, 2023, will earn $18 per hour starting next year, with pay increasing to $25 an hour in 2033. Urgent care clinics, skilled nursing facilities and other smaller facilities will be required to pay workers $21 per hour in 2024, with pay increasing to $25 per hour in 2028, according to the Los Angeles Times. The new law allows some healthcare facilities to apply for a temporary pause or alternative phase-in schedule of the minimum wage requirements if they have documentation proving financial distress. "California is putting a stop to the hemorrhaging of our care workforce by ensuring healthcare workers can do the work they love and pay their bills — a huge win for workers and patients seeking care," Tia Orr, executive director of SEIU California, said in a statement. "Californians saw the courage and commitment of healthcare workers during the pandemic, and now that same fearlessness and commitment to patients is responsible for a historic investment in the workers who make our healthcare system strong and accessible to all." n

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