TRIOS Health Announces Job Cuts, Asset Sales to Help Financial Outlook for New Hospital
Recent news reports have indicated the new TRIOS Southridge Hospital (formerly KGH) has financial challenges. During a public board meeting Thursday night, officials outlined some promising, but stunning, moves to help improve financial performance.
You may have seen part of the official statement we posted on our Facebook page Thursday evening. CEO Glen Marshall said this in his statement:
While many healthcare organizations, including local facilities, have already responded to the changing healthcare market by making difficult decisions to service lines and staffing, we felt we needed to complete the transition to our Southridge hospital and see what impact it would have on our operations. The transition to the new hospital, coupled with fluctuations in patient volumes - before and after the new hospital opening - and decreasing reimbursements have strained District resources as hospital administration has previously confirmed. The national trend has and will continue to be one of doing more with less. We have not been spared in that regard."
The District has made a 3% immediate reduction of the 1,200 TRIOS workers by letting go 40 workers go effective Friday, February 27th. Marshall said that will save about $3 million dollars for 2015.
In addition, the District plans to sell off numerous assets, and has been utilizing the help of a consulting firm to choose which ones will have the least impact on the District while providing the most financial support. According to Marshall in their news release:
"... sales of nearly $8 million in District assets are pending. The transactions include sales of the Grandridge building (8232 W. Grandridge Blvd.), water rights, and land near Vista Field. The closing of the three sales pending would result in more than $8 million in cash."
Marshall went on to say:
“For many years we struggled with an overcrowded and outdated hospital. We listened to the community’s voice saying ‘yes, we desperately need a new hospital, but do not build it with tax dollars.’ So we persevered, finding a way to get it built without increased taxes to hospital district residents . The new hospital opened July 15, 2014 and has experienced significant— and in many months record-breaking—patient volumes. Trios Health is committed to continuing to deliver high quality, personalized care to patients through what will be “stressful and emotional for some” as the District management proceeds with the operational improvement plan."
These moves are in response to recent financial disclosures that TRIOS is having difficulty making the $800,000 monthly lease payments on the new hospital. Board member Rick Reil felt it was a mistake for the District to have a contractor build the facility, then pay them a monthly lease. That move was done after a bond levy to fund the hospital had failed.
Some board members say there has been an increase in patients, business, and the billing transition is beginning to catch up with expenses. But they say it's not enough to quickly get them back on budget. It is expected the financial moves announced last night will put the facility on stable footing.