The news refers to the six-month period ending Dec. 31, during which the system’s long-term debt coverage fell below its legal obligations. The system is now required to set aside approxmately $17 million into a debt service reserve fund.
The cost-cutting strategy, dubbed “Back in the Black,” focuses on cutting staffing costs with the health system eliminating 94 positions through early January in addition to previously announced workforce reductions. Such cuts could save approximately $21 million, according to reports.
Kaweah CEO Gary Herbst described the situation at the time of the strategy launch as “dire.”
Editor’s Note: This was story was updated at 9:07 a.m. CT Feb. 15 to reflect an error in the original story claiming the healthcare system had defaulted on its debt as opposed to failing to cover its debt requrements.
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