Dartmouth Health sees financial losses rising and cites staffing costs

LEBANON — Driven largely by payroll costs, costs are exceeding revenues for Dartmouth Health, New Hampshire’s largest private employer, according to documents filed with bondholders last week.

Lebanon-based Dartmouth Health posted a loss of $22.1 million, or less than 1%, on an operating budget of $2.9 billion in the fiscal year ended June 30. It would have been a bigger loss if not for the 98.8 million DH received in federal stimulus funds. .

This trend only worsened in the first quarter of this year, which ended September 30 with a loss of $41.4 million, or nearly 6%, on an operating budget of nearly $770. millions of dollars. That loss includes $1.8 million in federal stimulus funds. The health care system expects no more, Audra Burns, a DH spokeswoman, said in an email Monday.

“While the pandemic appears ‘over’ for many people on an individual basis, healthcare organizations, including D-HH, continue to grapple with several hard-hitting issues born out of the pandemic,” wrote Dan Jantzen, chief financial officer of DH, in a Nov. 23 filing with bondholders of the obligated group Dartmouth-Hitchcock Health, which includes the Dartmouth Hitchcock Medical Center in Lebanon; Dartmouth Hitchcock clinics; the Alice Peck Day Memorial Hospital in Lebanon; Mt. Ascutney Hospital and Health Center in Windsor; New London Hospital; Cheshire Medical Center in Keene, NH; and Visiting Nurse and Hospice for Vermont and New Hampshire.

Staffing issues top the list of challenges. There is a nationwide shortage of nurses, which has driven up wages for permanent employees and traveling nurses, Jantzen wrote.

“Taken together, increased personnel costs for permanent in-house nurses and traveling nurses continue to have a major impact on D-HH’s financial performance,” Jantzen wrote. “A tight labor market has also increased wage pressure across the organization.”

DH is not alone in facing tax challenges. The University of Vermont Health Network ended its fiscal year Sept. 30 with a loss of $90 million, or 3.3%, according to VTDigger. This loss was also mainly due to personnel costs, VTDigger reported last week.

Although below the rates hospitals were paying during last winter’s COVID-19 outbreak, wages for travelers remain “significantly above pre-COVID rates,” DH told employees in a Tuesday message. which Burns shared in part with the Valley News.

Although the COVID-19 pandemic is now causing fewer deaths and fewer serious illnesses, it still affects staffing when workers fall ill.

“When patient-facing staff are out of work due to COVID-19, we need to ask other employees to work overtime and also rely more on travelers,” according to Tuesday’s message to employees. “This puts increased pressure on our overall capacity and available resources.”

Since other health care facilities are also understaffed, it is difficult for DH member hospitals to refer patients to nursing homes and other emergency facilities.

“The ability to move discharge-ready patients from D-HH hospitals to the appropriate post-acute care facility efficiently and quickly has not returned to pre-pandemic standards, and this disruption is also a significant contributing factor. at D-HH. current financial results,” Jantzen wrote.

Burns, DH’s spokeswoman, said that to address financial shortfalls, DH is focused on “improving our ability to refer patients from our hospitals to an appropriate post-acute care facility.”

She did not elaborate on how DH plans to do this as nursing homes and other facilities face similar staffing challenges.

Additionally, COVID-19 and inflation are affecting supply chains, causing product shortages and driving up the costs of drugs and other medical supplies.

“While we have faced and overcome financial challenges in the past and are confident in our ability to do so again, we must recognize the national scale and unprecedented macroeconomic nature of this situation, as well as the pace constant new problems that we face,” said Jantzen. wrote, noting that after the end of the first quarter of this year, the hospital began to see an influx of patients with respiratory syncytial virus, or RSV.

Treatment of the worst cases of RSV, usually in children 5 and under, requires patients to receive oxygen, intravenous fluids for dehydration and monitoring for changes in the patient’s condition, according to a press release on the DH subject sent last week. Dartmouth Hitchcock Medical Center Children’s Hospital is the only children’s hospital in the state.

In the two fiscal years prior to the pandemic, DH posted positive operating margins. In the fiscal year ended June 30, 2019, DH reported margin of $69.7 million, or about 3%, on a budget of $2.2 billion, according to its annual financial filing with bondholders. In the year ending June 30, 2018, DH reported a margin of $47.5 million, or approximately 2%, on a budget of $2 billion.

These results marked an improvement over fiscal 2017, when DH posted an operating loss of $7 million, less than half a percent, on a $2 billion budget; and from 2016, when DH posted a loss of $39 million, or about 2%, on a budget of $1.8 billion.

The healthcare system implemented a financial performance improvement plan to recover from these losses and Dr. Joanne Conroy, CEO of DH, succeeded Dr. James Weinstein in the summer of 2017.

But when the pandemic hit in 2020, DH ended the June fiscal year with a loss of $84.1 million, or about 3%, on a budget of $2.4 billion. This loss came despite receiving DH88.7 million through the federal CARES Act.

In fiscal 2021, as the pandemic persisted, DH ended with a positive margin of $53.5 million, or approximately 2%, on a total budget of $2.6 billion. That margin included $62.9 million in federal stimulus payments.

Now, with no further pandemic relief in sight, DH is “reducing capital spending as much as possible to improve liquidity,” Jantzen wrote. “We are committed to achieving sustainable financial results, but we cannot predict how the pandemic and its continued impact will affect operations or financial conditions going forward.”

In the meantime, he noted that DH and its members “continue to explore all options to improve our financial performance.”

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