Johns Hopkins All Children’s slips into the red in quarterly financial report

Johns Hopkins All Children’s Hospital posted an operating loss in the three months ended March 31, as the St. Petersburg pediatric hospital dealt with the fallout of federal and state probes into its practices.

The hospital had an $11.5 million quarterly operating loss, according to a May 13 financial report from The Johns Hopkins Health System Corp. and affiliates. Operating revenue dropped 7.1 percent to $119.9 million, while operating expenses climbed 10.5 percent to $131.4 million.

The operating loss was attributed to closing the hospital’s Heart Institute. The facility closed after an investigation by the Tampa Bay Times found seven children had died or were permanently injured due to substandard care in the cardiovascular surgery program.

In response to inquiries from the Times, Johns Hopkins began its own investigation, reached out to regulatory agencies and voluntarily ceased performing procedures at the Heart Institute, an earlier financial report filed in February said.

The most recent quarterly report, for the third quarter of Johns Hopkins 2019 fiscal year, was the first report to spell out how the issues at All Children’s impacted overall financial performance at Johns Hopkins Health System.

The Baltimore-based system, which includes six hospitals, managed care plans and physician groups, saw its operating income fall to $13.3 million for the three months ended March 31, compared to $45.1 million for the same period a year earlier, a 70 percent decline. Operating margin was 0.8 percent in the most recent quarter, compared to 2.7 percent in the year-earlier period.

“The decrease in income from operations and operating margin percentage was mainly driven by lower net patient service revenue at [Johns Hopkins All Children’s Hospital] as a result of the closing of the Heart Institute,” the May 13 report said.

While the “immediate jeopardy” status imposed on Johns Hopkins All Children’s Hospital by the Florida Agency for Health Care Administration and the Centers for Medicare and Medicaid Services was lifted in February, the agencies still are closely monitoring the hospital. CMS requested a new plan of correction related specifically to infection control, and the hospital expected an unannounced resurvey by AHCA sometime in May.

Johns Hopkins has not yet responded to a question from the St. Pete Catalyst about whether that resurvey has taken place.

Johns Hopkins All Children’s also signed a systems improvement agreement with CMS and hired an independent consultant to recommend and monitor changes and improvements.

“The safety of our patients is the top priority. We are confident that the work we are doing to ensure that JHACH continues to meet the highest standards of care will satisfy any concerns regulatory agencies, our patients, or our community may have,” the system wrote in its May 13 report. It also provided a link to a dedicated page on the hospital’s website with additional details regarding issues at the Heart Institute.