![]() “We will make necessary changes and use this scale to our advantage.”Ĭredit rating agency Fitch Ratings recently changed its rating watch of Butler Health System to “negative” after the health system reportedly breached a bank loan agreement with Truist Bank of North Carolina.įitch revised the rating on $79 million worth of revenue bonds. “What hasn’t changed is that these challenges are precisely why our respective boards came to the conclusion that we are stronger as a single system,” DeFurio said. He added that other health systems nationwide and in Western Pennsylvania are facing similar challenges, and the health system “cannot respond simply by increasing our prices” because of the way Medicare, Medicaid and health insurance contracts function. “These challenges were a compelling reason for the organizations to become one.” “Butler Health System and Excela Health were both fully aware of the financial challenges that we faced separately and together as we studied and completed the merger,” he said. He did not elaborate on what the plan might entail. Senior executive team members within the company are “working with their direct reports” on the cost-saving plan, and the entire health system is being scrutinized, DeFurio said in the letter. 31, Butler Health System reported an operating loss of more than $23 million, according to a continuing disclosure report.Īt Excela, the same six months in 2022 saw an operating loss of more than $15 million. “We must substantially reduce our operational costs.”įor the six-month period ending Dec. “November, December and January were difficult months, and we anticipate similar numbers for February,” DeFurio said in the letter. In the letter - sent to employees and medical staff at the Greensburg- and Butler-based health systems and acquired by the Tribune-Review - DeFurio cited ongoing financial pressures from the pandemic, staff shortages, inflation, cost increases, declines in reimbursement rates and the stock market as reasons for future cost-cutting measures.ĭeFurio, who had led Butler Health, became the new organization’s leader in January, Economic storm clouds are on the horizon for the newly combined Excela and Butler health systems, and a “significant expense reduction plan” is in the near future, according to an internal letter signed by President and CEO Ken DeFurio.
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