Nashville General leaders outline $8M cost-reduction plan as hospital runs monthly operating losses

Nashville General Hospital executives told the Hospital Authority Board that the hospital has run multi‑million dollar operating losses in recent months and proposed a set of cost‑reduction measures intended to stabilize cash through the fiscal year.

Chief financial staff and the acting chief executive described steep monthly deficits and a falling cash balance during the March board meeting and presented a plan that targets roughly $6.2 million in identified savings plus additional reductions still to be determined.

The hospital reported a net loss of about $2.2 million for January and a net loss of about $4.4 million for February, with year‑to‑date operating results well below budget, according to the finance presentation. Board members were also told cash on hand had declined from roughly $13 million at the beginning of the fiscal year to about $3.4 million as of the February report.

To address the shortfall, the executive leadership team (ELT) and finance staff proposed four primary levers: (1) a temporary hiring freeze and tighter position control to limit new and nonessential hires; (2) a targeted reduction in contract labor (travel nurses, temporary staffing and other agency labor) with an estimated $5 million annual savings from that line; (3) elimination or renegotiation of selected nonclinical contract services (about $1.2 million projected savings); and (4) operational changes in clinics, including a performance review of the Bordeaux clinic’s weekend urgent care and potential closure of the low‑volume urgent care component.

Doctor Blackledge, presenting the cost strategy, told the board that contract labor and physician on‑call payments had been high and that the ELT has already negotiated reductions in several on‑call contracts and has terminated or scheduled terminations of many nonclinical contract arrangements. "We have met term dates and we've executed on probably 90% of those," he said.

Board members pressed for more detail on the drivers of revenue shortfalls. A board member noted outpatient volume exceeded budgeted visits by thousands of visits but revenue was materially lower; staff explained part of that gap was loss of expected cath lab procedural revenue (the cath lab was not yet performing interventional procedures) and an over‑optimistic per‑visit revenue estimate in the budget. Executives said bringing interventional cardiology and the cath lab to full operation remained a priority because it would materially increase revenue.

Executives emphasized the plan is iterative: they expect about $6.2 million of identified savings to be realized in the near term and are continuing to evaluate salary and other categories (described as "to be determined") to reach additional reductions. The board was told these steps are intended to allow the hospital to reach June 30 without exhausting cash while the hospital seeks supplemental appropriations from Metro government.

Board members also discussed the upcoming budget cycle and urged the finance team to produce more realistic per‑visit revenue and payer‑mix estimates so the next year’s budget reflects actual net revenue per visit rather than the optimistic assumptions used in the prior budget.

The board did not take a formal vote on the financial report at the meeting; the finance presentation was received as informational and the committee will bring formal approvals back to the board after refining the plans.

Ending: Hospital leadership committed to returning a monthly update to the board and to providing the finance committee with the more detailed action and staffing plans the board requested.