Executives of Vanguard Health Systems, Nashville, cautioned investors that the company faces continued pressure from all payers to cut costs while improving quality and outcomes as the company reported a loss for its fiscal year ended June 30.
Vanguard reports loss for 4Q, fiscal year
Charles Martin, chairman and CEO, said during a conference call to discuss the financial results that Vanguard’s management team has a track record of being able to accomplish cost-cutting while improving its services. The company is looking for opportunities to participate in bundled payment or risk-sharing arrangements that build on its experience, Martin said.
Vanguard, which made acquisitions that total $2.4 billion in annual revenue during its fiscal 2011, also is looking to build out its networks in its current markets by adding the alternate sites that payers are demanding as they push their patients to seek care at lower-cost, lower-intensity settings, Martin said. “Our goal is—how do we position ourselves to get weaned off the fee-for-service business, because we’re either going to get weaned off or knocked off before things are said and done,” he said.
For its fiscal fourth quarter, Vanguard reported a loss of $9.9 million, compared with profits of $2.8 million in the year-ago quarter. Revenue increased 75%, to $1.5 billion. Revenue at operations owned for 12 months or more, including its health plans, increased 3.9%, according to the release. The fiscal 2011 fourth quarter included a pretax expense of $31.3 million primarily related to canceling the company’s transaction and monitoring fee agreement with its private-equity sponsors as a result of its June IPO. Comparing the quarters on a same-facility basis, admissions declined 2.5% and adjusted admissions increased 0.7%. Factors in the weak volume include pressure from payers for lower-cost settings and observation status, instead of admissions, and the weak economy, Vanguard executives said.
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