Lifespan, RI’s largest hospital system, posts $49 million loss in third quarter: ‘Rhode Island’s healthcare system is in crisis’

Lifespan operates the state’s only Level 1 trauma center and five of the state’s hospitals, which include Rhode Island, The Miriam, Hasbro Children’s, Newport and Bradley Hospitals. For fiscal 2023, Kirshner said Lifespan plans to develop a “challenging but achievable” budget, which includes building a talent pipeline, hiring additional staff, decreasing reliance on contract labor, Lifespan’s continued efforts to improve operational efficiencies and continued recovery. elective surgeries.

Miriam Hospital in Providence.Jonathan Wiggs/Globe Staff

The 2023 budget has yet to be finalized, according to Lifespan spokeswoman Kathleen Hart. The company’s fourth quarter ends on September 30.

In an investor presentation that was shared with The Globe on Thursday, finance officials said Lifespan partnered with Alvarez & Marsal, a New York-based advisory firm, and conducted a review and stress test in august. Lifespan finance officials are now incorporating the company’s recommendations into the 2023 budget.

“Lifespan is not alone,” Kirshner said. “Hospitals across the country continue to be financially challenged by labor shortages, rising cost of supplies and overall inflation, and lower than usual patient volume, in particularly due to a decline in elective surgeries and bed closures.”

Kirshner said some of those issues were “somewhat alleviated” by government funding through the American Rescue Plan Act. Lifespan received about $20.9 million in total in ARPA funds, but Kirshner said he expects this “level of support not to continue moving forward.”

Kirshner said the “vast majority” of Lifespan’s incremental costs relate to “external factors” over which he believes Lifespan has limited control. “We are not in a position to unilaterally raise rates with health insurers or the federal government to address these losses,” Kirshner said.

Much of Lifespan’s budget problems are tied to labor shortages, which have plagued the healthcare industry in Rhode Island since the pandemic began. As of February 2022, Lifespan is looking to fill approximately 2,500 positions. To help recruiting efforts, hiring managers announced signing bonuses worth tens of thousands per new hire, referral programs, workforce development opportunities and fee waivers. of schooling. In January, President Biden announced he was sending military medical teams to six states, including Rhode Island, to help ease staffing shortages in hospitals during a COVID-19 surge. But those federal workers left the first week of March.

Signs posted in the windows of Rhode Island Hospital in Providence serve as a send-off for the military medical team that helped the hospital through some of the pandemic’s darkest days in March 2022.Bill Murphy / Lifetime

Kirshner said Lifespan has sought to “address staff burnout” due to the pandemic that has prompted resignations and early retirements by making “target market adjustments for many” clinical and non-clinical roles and by investing “several million this year to ensure that our professionals are paid”. at rates that compare favorably in our region.

These investments and changes resulted in a $35.2 million increase in compensation and benefits over the last quarter, Kirshner said. In addition to employee investments, Lifespan’s contract labor costs peaked in May 2022 at $13.1 million, but then declined to $10.5 million in June and $9 million in July.

But as of mid-August, Lifespan officials were still seeking to fill more than 1,800 job vacancies, forcing the company to hire traveling nurses and temporary agency workers, who in most cases are paid more than a permanent employee of the hospital system. .

Inflationary pressures added more than $4 million in costs to the bottom line for supplies alone, Kirshner said, and energy costs created additional budget pressure.

“Now more than ever, investments in our health care system are needed to ensure our long-term stability,” Kirshner said. “We need the support of business leaders, the community and the state at this critical time that [share] our goals to maintain excellent care and jobs in Rhode Island.

The news comes nearly three months after longtime Lifespan CEO and President Dr. Timothy Babineau resigned in late May. Babineau’s departure announcement came less than two months after Rhode Island Attorney General Peter F. Neronha and federal regulators rejected a proposed merger between Lifespan and Care New England, the world’s second-largest healthcare system. state health care, which included a minimum contribution of $125 million. Brown University. If approved, the new system, which would have been called Rhode Island Academic Health Care System Inc., could have been the largest employer in the state.

Arthur Sampson began as interim president and CEO of Lifespan on June 1, coming out of retirement after 45 years of working in healthcare – 35 of which were spent at Lifespan hospitals. Executive search firm WittKieffer is conducting a nationwide search for a permanent CEO, who Lifespan financial advisers say will be key to driving transformation and institutional security in the years to come.


Alexa Gagosz can be contacted at [email protected] Follow her on Twitter @alexagagosz and on Instagram @AlexaGagosz.

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