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CEO blames poor execution as loss swells at Presence Health

Poor billing collection played a big role as operating losses jumped last year at Presence Health, the largest Catholic hospital network in Illinois.

The system posted an operating loss of about $186 million in 2015, nearly 15 times as much as the year before.

Almost half the loss was due to a poor billing collection system. Some bills were so old they had to write them off, said CEO Michael Englehart, who started Oct. 1. The system also didn't have the best controls on its medical malpractice insurance, he said.

“Part of this is true blue operating effectiveness that we have to address,” Englehart said. “We are actually quite optimistic as we go through 2016 that we can get this back on firm footing.”

Presence, one of the biggest Chicago-area health systems by revenue, provided a few key financial details, including its 2015 operating loss. But the system's audited 2015 financial statements were not available for further analysis.

The system has 11 hospitals across the state and more than 20,000 employees. In 2014, Presence had a $12.7 million operating loss on $2.58 billion in revenue, according to a financial statement. That was much smaller than in 2013, when the system's operating loss was $60.3 million on $2.56 billion in revenue.

Presence suffered the financial blow last year despite selling off properties including the money-losing Our Lady of the Resurrection Medical Center, a community hospital on the Northwest Side of Chicago. That deal closed in late 2014.

Englehart has brought in consultants to help establish better processes and technology to make sure medical bills are coded correctly and collected. He's working with doctors to ensure they're coding properly so the system gets paid for all the services it provides, and he's re-evaluating purchasing contracts.

The plan also includes not filling vacant jobs. If any layoffs happen, they will begin at the corporate level, not in patient care, such as nurses and doctors, Englehart said.

“We are fixing, we are rebuilding and we will grow,” he said. “This is really about execution and really becoming a more conservative organization.”

He's also surrounded himself with several new executives, including former colleagues from his lengthy tenure at Advocate Health Care, the largest hospital network in the state. He was president of Advocate Physician Partners, a network affiliated with the health system.

Dana Gilbert, who was chief operating officer at Advocate Physician Partners, is now chief strategy and population health officer at Presence. Dr. Ann Errichetti, former CEO of Advocate Condell Medical Center in Libertyville, is leaving her job leading a hospital in Albany, N.Y., to join Presence in early May as chief operations officer and chief academic officer.


"CEO blames poor execution as loss swells at Presence Health" originally appeared on the website of Crain's Chicago Business.


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