Dartmouth Health’s finances on path to recovery, filing says

  • Dartmouth Hitchcock Medical Center welcomed guests to a ribbon cutting for its new $150 million, 240,000 square foot Patient Pavilion in Lebanon, N.H., on Friday, April 14, 2023. The building will open in May and house intensive care, heart and vascular care and medical specialty care units. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com. James M. Patterson

Valley News Staff Writer
Published: 5/30/2023 5:24:30 PM
Modified: 5/31/2023 4:59:29 PM

LEBANON — The financial picture for Dartmouth Health appears to be improving a bit, according to a recent filing with bondholders.

While the Lebanon-based health system continued to lose money in the third quarter of its fiscal year, which ended March 31, DH saw a positive margin of 1.9% in March, making it the first month since fall of 2021 that DH had seen a positive operating margin.

The loss for the quarter was $15.1 million, equivalent to about 2% of DH’s revenue, according to the Friday filing.

“Despite the recent operating loss, it’s important to note that we are experiencing positive trends and progress in our financial improvement,” Audra Burns, a DH spokesperson, said in an email.

The recent deficit was less than the $36.6 million loss in the preceding quarter, which ended Dec. 31, 2022, and less than the loss during the same quarter last year, $25.9 million.

In the filing, DH CFO Dan Jantzen credits an ongoing performance improvement plan for the reduced losses. The opening earlier this month of a new patient pavilion that will ultimately add 64 beds at Dartmouth Hitchcock Medical Center, the system’s flagship in Lebanon, is expected to further improve DH’s finances moving forward.

“We expect that the improvement will come from a combination of initiatives that increase volumes and revenues and decrease expenses, as well as from additional inpatient capacity being constructed on the Dartmouth Hitchcock Medical Center (DHMC) campus,” Jantzen wrote.

DH, which includes Dartmouth Hitchcock Medical Center and associated clinics, Alice Peck Day Memorial Hospital in Lebanon, Mt. Ascutney Hospital and Health Center in Windsor, New London Hospital, Cheshire Medical Center in Keene, and the Visiting Nurse and Hospice for Vermont and New Hampshire, launched its performance improvement plan in November to address financial challenges.

The main challenges faced by DH are a nationwide hiring shortage, leading to the use of expensive traveling workers, and delays in discharging patients from hospitals to lower levels of care. The latter is primarily caused by a shortage of skilled nursing and inpatient rehabilitation facility staff.

Overall, the loss for the first nine months of fiscal year 2023 have amounted to $93 million, or 4%, which was over $36 million higher, excluding stimulus funds, than the loss during the same period last year. Last year’s results for the first nine months were bolstered by more than $88 million in stimulus funds that have all but run out this year, when DH has received just $1.8 million in stimulus money. DH officials do not anticipate further stimulus funding this year.

Expenses for the first nine months of the fiscal year totaled $2.35 billion, marking an 11% increase of $233.5 million compared with the previous year. The primary drivers of expense growth were compensation, medications, and purchased services. Salaries and employee benefits were up $112 million, or about 9%, over the same time period last year.

Following the collapse last year of a plan to merge with GraniteOne Health, the system that includes the Manchester-based Catholic Medical Center, DH continues its efforts to expand, the filing noted.

A proposal to bring into the fold Southwestern Vermont Healthcare Corp., which includes Bennington, Vt.-based Southwestern Vermont Medical Center, has received regulatory approval and the parties are targeting a closing date of July 1.

Meanwhile, a plan to add on the Claremont-based Valley Regional Hospital is undergoing regulatory review, and the parties aim to close the deal by the end of this calendar year, the filing said.

Nora Doyle-Burr can be reached at ndoyleburr@vnews.com or 603-727-3213.

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