Catholic Health Initiatives, one of the largest not-for-profit health systems in the U.S., said it will cut up to 1,500 jobs through next month after unexpectedly weak performance in its first quarter.
The news comes as the Englewood, Colo.-based system digests several recent acquisitions and continues its expansion into health insurance markets. The system aggressively entered Texas with a string of deals that began in 2013 and used health plan acquisitions in Arkansas and Washington state as vehicles to launch its health insurance arm. Texas is one of two CHI markets to generate more than $1 billion in annual revenue.
The system's first-quarter financial statements are not yet public, but spokesman Michael Romano said in a statement that CHI suffered losses in the first quarter, in part because of a drop in the use of its services. “As a result of lower than expected operating and financial performance in the first quarter of the 2015 fiscal year, Catholic Health Initiatives and its market organizations will take action to reduce expenses across the system,” Romano said.
The job cuts account for less than 2% of the system's employees and will likely target those in administration and support roles. The system has not yet identified which jobs will be cut.
CHI's poor first-quarter performance follows additional losses in recent years. The system reported an operating loss in the year that ended June 30 of $14 million on revenue of $12.4 billion. That follows an operating loss of $54.9 million on revenue of $9.9 billion the year before. The system's 2012 operations were profitable, with income of $311 million on revenue of $8.5 billion.
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