Catholic Health Initiatives lost more on its operations in the quarter that ended Sept. 30 than it did in the entire previous year, according to the system's just-released financial statements.
CHI also disclosed that it has reached a tentative agreement with the U.S. Justice Department to resolve allegations stemming from a nationwide investigation of Medicare claims for implantable cardiac devices.
Earlier this week the Englewood, Colo.-based health system—one of the largest not-for-profit providers in the U.S.—said it would cut 1,500 jobs in the coming weeks to make up for larger-than-expected losses.
In statements released on Friday for the first quarter of its fiscal 2015, CHI reported an operating loss of $134.7 million on revenue of $3.2 billion. That poor performance follows an operating loss of $14 million on $12.4 billion in revenue in fiscal 2014.
The system's operating revenue increased by 8.1% from the same quarter a year ago, but expenses climbed 11%, which CHI said in its financial statement was “primarily attributable to recently completed acquisitions.” The system has been an aggressive buyer in the last two years, expanding its geographic reach and diversifying its operations from hospital and ambulatory care into health insurance.
The announced job cuts, which affect roughly 2% of the multistate health system's workforce, are one strategy the system is using to reduce its operating costs and improve its finances, officials said in a statement.
“CHI is addressing the declines in profitability through focused clinical and operational initiatives, a targeted plan for growth in key markets and significant improvements in revenue-cycle operations,” the statement said. “In addition, CHI has launched a comprehensive program to reduce costs across the enterprise of 105 hospitals and hundreds of other healthcare facilities in 18 states.”