PROVIDENCE, R.I. (WPRI) – Lifespan, Rhode Island’s largest hospital group, has managed to operate in the black so far this year even as its biggest local rival, Care New England, struggles with major red ink.
Lifespan’s operations made about $7 million from Jan. 1 to March 31 and $1 million during the previous quarter, according to the hospital group’s latest financial statements. Care New England’s operations lost $40 million over the same period.
Lifespan, the owner of hospitals including Rhode Island and Miriam, has more than $2 billion in annual revenue and employs about 14,500 workers, making it the largest non-government employer in the state. So far this fiscal year’s results are an improvement over the same point a year ago, when Lifespan’s operations posted a six-month operating loss of $3.7 million.
Lifespan spokesman David Levesque said the hospital system’s finances “are moving in a positive direction,” noting the group’s operations lost $33 million in the 2014-15 fiscal year and effectively broke even in 2015-16. But, he said, “we, like all health systems, are facing immediate and ever-growing financial challenges at both the state and national level. We must continue to adapt and be strategic.”
“Achieving any operating surplus requires an extraordinary amount of work – particularly during an era of flat reimbursements and rising expenses in virtually every area of our system’s operations,” he said.
Levesque attributed Lifespan’s stronger performance primarily to “strong patient volume in both inpatient and outpatient services, which is partially offset by soft reimbursement rates.” He also said executives have been working to streamline operations for several years, and said LifeChart, the organization’s new electronic-record system, “has already added value.”
However, Levesque said Lifespan is still concerned that its operating margin was a relatively meager 0.7% in the six months ended March 31, describing that as “well below the 4% operating margin most institutions like ours strive for.”
The new financial results come as Lifespan’s leaders keep a close eye on Care New England’s attempt to merge with Partners HealthCare, Massachusetts’ largest hospital group, after it spurned Lifespan’s own offer. Care New England executives have said they hope to reach a definitive agreement with Partners this summer.