How Hoag has fared since splitting from Providence

Hoag, a three-hospital system based in Orange County, Calif., ended its affiliation with Renton, Wash.-based Providence in January after nearly a decade together. More than six months after parting ways with the 52-hospital system, Hoag is successfully navigating the challenges that have taken a financial toll on many health systems. 

The first six months of this year have been challenging for hospitals and health systems across the nation, with many reporting steep operating losses. Hoag ended the first half of this year with operating income of $31.7 million, down slightly from $34.6 million in the same period of 2021. 

How is Hoag remaining financially stable during such a turbulent time in healthcare? The key is focusing on staff, physician and patient experience, Hoag Executive Vice President and CFO Andrew Guarni told Becker's

Staffing issues, and the rising costs tied to them, are a top concern for hospital executives across the country. Hoag tried to stay ahead of the issues by proactively giving staff out-of-cycle pay increases. The health system gave the first increase in August of last year, the second in December and a third in April. 

"Spreading the increases out allowed us to better incorporate the additional expense into our financials, as well as strategically exceed expectations of staff, while remaining extremely wage competitive in the market," Mr. Guarni said. 

The effect of those increases has been evident in recent months. Mr. Guarni said Hoag is seeing higher offer acceptance rates and significantly less turnover. The health system was also able to avoid using registry staff and the associated expenses. 

The wage increases in combination with other measures to improve staff and physician experience has translated into a better patient experience, according to Mr. Guarni. "That has resulted in continued strong volumes, in both the inpatient and outpatient settings," he said. 

Teaming up with a larger organization can, in some cases, help a health system better navigate the challenges of the industry. However, that isn't always true, and Hoag leaders believe being hyper-focused on physicians, staff and the local community is the key to success. 

"We believe navigating in today's increasingly complex healthcare environment requires a level of engagement and market knowledge that is deep and responsive and rewards less complexity, local decision making and community connection," Mr. Guarni said. 

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