Dive Brief:
- Baptist Healthcare will close its outpatient behavioral health office in Louisville, effective June 16, Louisville Business First reported. Inpatient behavioral health services will continue to be offered 24/7.
- The news comes just days after CEO Steve Hanson abruptly resigned, as reported by Louisville Business First. He had led the nonprofit health system since March 2013.
- That news followed last week’s announced layoff of 228 employees, due to restructuring, also reported by Louisville Business First. The company said the realignment was needed to “best meet the needs of our patient and the communities within a challenging financial environment.”
Dive Insight:
It was a rough week for Baptist Healthcare and illustrates the difficulties health systems face in restructuring. And restructuring is something more hospitals are doing as new federal regulations and the move to value-based care and reimbursement create the need for new business and clinical practice models.
Healthcare reform has had a major impact on hospital reimbursement. Despite millions more people being insured under the Affordable Care Act, high-deductible health plans can push patients beyond their limits after expensive episodes of care, and if patients can’t pay for the services they received, hospitals’ bad debt goes up.
Couple that with lower reimbursement rates and the shift to outpatient care, and many hospitals are finding they have beds and property they can no longer financially support.
Hospitals should review their assets, business plan, market and supply chain and see how they align with their capital strategy, Patrick Pilch, head of BDO Consulting’s healthcare advisory practice, told Healthcare Dive last fall. “Understanding your costs of care as well as your cost of capital is imperative,” he said. “Then align that to a future strategy. That’s where you’re going to pull your way out of debt.”