Trios Health cuts more staff amid financial crisis

More Trios Health employees lost their jobs in January amid continued financial challenges throttling Kennewick’s public hospital district.

Among the most recent issues are:

  • Twenty employees losing their jobs Jan. 19.
  • Declining patient volume.
  • Delayed reimbursement for services to the tune of $11 million over five years.
  • Resignation of Trios’ chief financial officer.

Despite the financial crisis, Trios officials are imploring the public to continue to get their health care from Kennewick Public Hospital District providers.

“We need our community. We need our community not to turn its back. If we don’t have patients, we’ll lose more people,” said Lisa Teske, Trios Health’s director of marketing and development.

“We are here; we are ready to serve; we have enough staff. We have very qualified staff to deliver excellent patient care. Our plea to our community is please come and let us serve you. Otherwise, we’ll be back here again.”

Trios Health, which operates two hospitals and multiple outpatient care centers throughout Kennewick, filed for bankruptcy protection in June as it works to reorganize $221 million in debt.

The January layoffs — which include non-patient and patient care departments — will save $4 million. They come on the heels of 23 layoffs and reduced work schedules announced in the spring that totaled about 95 full-time equivalent positions.

“When we did reductions in April, we had savings from that, but they were negated by our union contracts, which had mandatory raises in them,” said Trios Health CEO Craig Cudworth.

As a result, Trios has suspended raises across the health system since September for a savings of about $2.2 million.

“We couldn’t afford it,” Teske said.

Declining patient volumes that came in the wake of last year’s announcements about Trios’ financial crisis and a massive medical records data breach by a former employee over a period of more than three years only created additional setbacks.

“Patient volumes have dropped because of public fears about the bankruptcy,” Cudworth said.

This combined with significant reductions to reimbursements related to the Affordable Care Act continue to eat away at Trios’ financial health. A three-month gap exists between when patients receive service and when Trios gets paid for it “hit our cash pretty hard. We’re maxed out on our payables,” Cudworth said.

But the wave of financial woes isn’t affecting the CEO’s outlook.

He’s convinced if the Tri-Cities continues to support Trios, the hospital district will emerge from bankruptcy onto stronger footing.

Teske said Trios has been trying to be transparent about the challenges with its staff by offering a video update from the CEO each week as well as a communication tool called The Loop in which employees can ask administrators questions anonymously. Teske said 400 questions have been answered in less than a year.

“As soon as we can share something, we do,” Teske said.

One rumor Trios hopes to put to bed is that CFO Tony Sudduth is fleeing, Cudworth said.

Sudduth, who has been with Trios since 2014, took a job with a startup corporation in Florida that buys and manages hospitals, an opportunity too good to pass up, Cudworth said. Sudduth’s last day is Feb. 2.

To fill the important position quickly, the Kennewick Public Hospital District agreed to bring on an interim CFO on Jan. 22, as part of the Quorum Health Resources contract.

The board hired Quorum Health Resources, a Tennessee-based management consultant firm, to address Trios’ financial problems in 2016. The board recently renewed the Quorum contract until Trios emerges from bankruptcy or is sold.

Requests for contract information could not be provided by press time. The initial $395,000 Quorum contract was for one year with an option to renew.

Cudworth is a Quorum employee.

Quorum took a hard look at Trios’ financial health, issuing a 400-page report last year recommending the elimination of 115 full-time equivalent positions, among other measures.

Teske said the health district got creative by asking people to reduce their schedules and shifting hours around.

“We did the best we could for everybody. When you pile that on with the rest of the year, it wasn’t enough. Deeper cuts were necessary and now we have to do it,” Teske said. “Unfortunately, our attempt to do this more gently, given all other things, didn’t work. So here we are.”

With the recent layoffs come a renewed focus on better managing staff with new productivity software. The new program measures the balance between patient volume and staff based on national standards for similar-sized hospitals. Trios said its goal with closely monitoring these standards is to hit 100 percent productivity to make sure there’s appropriate employee staffing — not understaffed or overstaffed.

The new system generates clearer reports that go to department heads who will be held responsible for meeting the parameters.

Teske noted that patient safety and quality won’t be sacrificed.

Cudworth pointed to Trios Health’s recent three-year accreditation from the Joint Commission for how seriously the health organization takes patient quality and safety. Trios Southridge Hospital, Trios Women’s & Children’s Hospital and its Home Health Care service line received re-accreditation, effective July 14, 2017. The independent organization certifies health care organizations and programs in U.S. for meeting performance standards.

As the hospital district winds its way through bankruptcy court, Cudworth reports reaching an agreement with two of its three largest creditors, but that it has been sued in bankruptcy court by an equipment lessor owed $24 million.

Until that case is resolved, finalizing a sale of the health district remains on the back burner.

“In order for Trios to emerge from bankruptcy, we have to pay our debts. The only way to pay our debts is a sale. We’re negotiating the terms of our sale,” Cudworth said.

Trios Health is exploring a relationship with RCCH HealthCare Partners, a Tennessee-based health care system, and UW Medicine that could reorganize the troubled Kennewick Public Hospital District’s existing rent and debt obligations.

Negotiations are progressing well and some news is expected to be announced at the Jan. 25 board meeting, Teske said. The meeting is at 5 p.m. on the third floor of the Trios Care Center at Southridge, 3730 Plaza Way, Kennewick.

But until the legal and financial issues are resolved, Trios stands ready to do its job: provide good health care to the community, Teske said.

“This doesn’t work without patients. As much as hearts are breaking, we need feet through the doors, people. We’re very hopeful about the path forward and the future here,” she said.

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Read more from Trios CEO Craig Cudworth: https://www.tricitiesbusinessnews.com/2018/01/11/trios-support/

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