CHI hopes di­vest­ing hos­pi­tals in Louisville will boost earn­ings

Modern Healthcare - - REGIONAL NEWS - —Dave Barkholz

Catholic Health Ini­tia­tives halved its op­er­at­ing losses to $40.1 mil­lion in the third quar­ter of fis­cal 2017, the hos­pi­tal gi­ant said in a fi­nan­cial dis­clo­sure that de­tailed why it plans to di­vest its money-los­ing Louisville, Ky., hos­pi­tals.

Ken­tuck­yOne Health’s Louisville hos­pi­tals posted a $12.7 mil­lion op­er­at­ing loss in the quar­ter on rev­enue of $231 mil­lion, com­pared with an op­er­at­ing loss of $23.8 mil­lion in the year-ago quar­ter.

CHI, the na­tion’s third-largest not-for-profit hos­pi­tal sys­tem, an­nounced this month that its op­er­at­ing sub­sidiary, Ken­tuck­yOne, is sell­ing most of its Louisville op­er­a­tions to stem losses there. Ken­tuck­yOne CEO Ruth Brink­ley also re­signed in the face of that per­for­mance.

Ken­tuck­yOne is seek­ing buy­ers for 10 of its fa­cil­i­ties across the state. The sys­tem will fo­cus its at­ten­tion go­ing for­ward on its mar­kets in Lex­ing­ton and eastern Ken­tucky.

In its dis­clo­sure, CHI es­ti­mated the value of the as­sets be­ing di­vested in Louisville at $534.9 mil­lion.

Earn­ings in CHI’s third quar­ter would have been sig­nif­i­cantly bet­ter without losses in CHI’s Louisville op­er­a­tions. CHI posted $325 mil­lion in third-quar­ter earn­ings be­fore in­ter­est, taxes, de­pre­ci­a­tion and amor­ti­za­tion, ex­clud­ing one­time items. That’s a 31% in­crease com­pared with the year-ago pe­riod.

Brink­ley

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