Verity Health, formerly Daughters of Charity Health System, cut costs in the first nine months of its fiscal year but dwindling patient volume took a toll on the Los Altos, Calif.-based system's finances.
Private investment firm BlueMountain Capital began overseeing the six-hospital system's operations Dec. 14. The transaction gave the system access to more than $250 million in new capital.
Since the deal closed, Standard & Poor's has upgraded the outlook on Verity's debt to stable from negative. S&P said the revision was based on the system's more stable financial profile following the transfer of management responsibilities to BlueMountain.
Although there are some bright spots in Verity's finances, the system had a rocky first nine months of its fiscal year. It recorded revenue of $993.9 million, down from $1.1 billion in the same period of the year prior.
Lower year-over-year patient volume caused the system's net patient service revenue to fall 11.4 percent in the nine-month period. Verity saw a decline in patient discharges, emergency room visits and inpatient and outpatient surgeries, compared to the same period of the year prior.
Verity did cut costs in the nine months that ended March 31. The system reported a 4.4 percent year-over-year decline in operating expenses.
Verity ended the nine-month period with an operating loss of $106.4 million compared to an operating loss of $55.3 million in the same period of the year prior.
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