NYC Health + Hospitals ended the third quarter of the 2017 fiscal year with an operating loss that had doubled year-over-year, from $349.6 million in third quarter FY 2016 to $673 million this third quarter, according to unaudited financial documents.
Despite a rise in operating revenue of $117 million from last year's third quarter to $6.7 billion for this year's third quarter, the system struggled under the weight of operating expenses that also rose. Last year's third quarter operating expenses totaled $6.9 billion, while this year's third quarter operating expenses swelled to $7.4 billion.
Despite how it looks in black and white, NYC Health + Hospitals said they are nevertheless maintaining an optimistic outlook for the future.
[Also: NYC Health + Hospitals lays off 476 to stem financial bleeding]
"We look forward to concluding FY 2017 (on June 30) having exceeded the $779 million gap closing identified in the beginning of the year and expecting to close with $185 million cash on hand. And we have already identified $1.2 billion in gap-closing initiatives for FY 2018," the system said.
First, the system's recent rollout of the Epic EHR system and revenue cycle components is expected to net $142 million in additional revenue once implementation is fully complete, which is expected to be in the last quarter of 2020. NYC Health and Hospitals will invest $289 million over the next five years to fully implement the new system at its 11 hospitals, five long-term care facilities, and more than 70 community-based health centers. City government has allocated $150 million in capital funds. The system will invest $139 million out of its operating costs, pending board approval.
[Also: NYC Health + Hospitals adds $289 million revenue cycle system to Epic EHR]
"The new technology will standardize revenue collection in the 11 public hospitals and across dozens of community-based patient care sites, and it will integrate seamlessly with the Epic patient electronic medical record system that NYC Health + Hospitals began to adopt last year. Epic's revenue cycle technology will create a common platform for all the health system's providers, who will be able to complete tasks without having to jump from system to system," the system said.
In addition, the system outlined some major initiatives in several categories that are projected to make big strides in closing the sizeable budget gap. In terms of revenue, they are looking at implementing Medicaid Waiver programs, which could yield $483 million, pursuing federal and state charity care funding to the tune of $85 million and implementing health insurance initiatives, which is expected to capture another $252 million in revenue.
[Also: NYC Health + Hospitals delays next phase of $764 million Epic EHR implementation]
Efforts to cut expenses will include implementing Supply Chain and Care Management Initiatives which is expected to yield $137 million, as well as restructuring and personnel initiatives which should mean $250 million in savings, the system said.
The system has recently laid off more than 400 employees earlier this month. Most were management positions.
"We implemented the difficult but necessary action of restructuring management to help build a stronger, more agile, and more stable public health care delivery system. By restructuring and reducing unnecessary layers of management, we can better direct resources where we need them most -- at the front line of patient care," the system said.
Twitter: @BethJSanborn