Summa's financial losses continue to mount
A new financial disclosure shows Summa Health lost more than $33 million in the first half of this year, compared with a $14 million profit for the like period last year.
It's not surprising, given that earlier this summer, interim CEO Dr. Cliff Deveny warned that the system was on track to lose more than $60 million in operating income this year.
That announcement came at the tail end of the second quarter, which he said at the time he expected would look similar to the first quarter's $15 million loss.
No one from Summa was made available to comment on the latest financial report.
For the first six months of 2017, compared to the same time the prior year, inpatient admissions decreased by 7% and outpatient visits decreased by 6%, according to the financial report, posted Aug. 15. Other patient volume measures showed surgical cases increased 3%, observation cases decreased 14% and emergency visits decreased 4%. Also, for the first six months of this year, the health system brought in more than $643 million in total revenue, more than $40 million shy of what it brought at this point last year.
When Deveny announced the projected $60 million operating loss — which would come on the heels of a $30 million profit in 2016 — he attributed the drop to competition in the market and provider and patient perception of Summa following a tumultuous start to the year.
Deveny began his role in March, replacing Dr. Thomas Malone, who resigned after strong backlash to a decision to not renew the contract of the independent physician group that had staffed the hospital's emergency departments for decades.
Summa's bond rating and balance sheet put it in a good position to be able to weather this, Deveny said in June, but changes had to be made.
In a June 26 memo to Summa employees, staff and boards, Deveny announced the system would eliminate about 300 positions — saving an estimated $12 million — as well as discontinue services, consolidate units and reevaluate ongoing capital needs.
"If we don't do these things, I can assure you the name on our badges will no longer say Summa Health, our employees at all levels of the organization and our community will see unprecedented change, and our independent physicians will be faced with the reality of what it means to practice in a community that no longer has an independent, local option for them," the memo said. "I believe today, as strongly as I did when I decided to come back to Summa, that we can be successful. Yet we must do it with eyes wide open, and I send you this letter so you can understand what is at stake and what we must do, not only for Summa but for our community."
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.