Swedish Medical turns $90 million loss into $40 million profit
Posted on March 15, 2013 at 7:06 PM
Updated Friday, Mar 15 at 8:14 PM
A year ago the Seattle-based Swedish medical system was looking at a nasty bottom line.
“We were trending to lose about $90 million for the year,” said CEO Kevin Brown. “It actually started in the fourth quarter of 2011.”
Brown says fewer paying patients were coming in and the 102-year-old non-profit had to make some changes.
“Our economic viability in this region requires us to find a better way, a smarter way, to deliver great product,” said Brown, “but it has to be at a lower cost.”
Swedish closed its home-health program, shedding more than 200 staff positions. Five-hundred more positions were eliminated, with most of those people taking a severance package. Brown calls it a “voluntary separation program” and says it was both painful and successful.
“It came with an additional price tag, but it was a great investment for us,” said Brown.
Swedish looked for places system-wide to trim waste and improve efficiency, expanding new-age technology to supplement patient-care and streamline record-keeping. Also, a new partnership with the much bigger Providence Health and Services helped provide more resources, spread costs and offered major financial advantages.
“We were able to refinance our hospital bonds and by doing that as part of the Providence affiliation, we were able to save $74 million of interest on those bonds,” said Brown.
And that projected $90 million loss? Brown is now happy to announce Swedish finished the year $40 million in the black, what he calls a team effort and a remarkable turnaround. But of course that remarkable turnaround is just a one-year snapshot in a much bigger, more complicated picture.
“The challenges have just started,” he said. “Health care is a full contact sport and it’s not going to get easier.”