Edward-Elmhurst Health must cut $35 million
Edward-Elmhurst Health confirmed Friday it must cut another $35 million from its budget for the fiscal year that begins July 1.
The cuts follow a major $92 million accounting error revealed earlier this week. The West suburban hospital network based in Naperville would not discuss the cuts, stating it's too early in the budget planning process.
The major cutback comes after the hospital network discovered and announced earlier this week that it overestimated by $92 million how much patients and insurers owed the health system. The error accumulated over more than six years based on recommended accounting practices at each of the three hospitals in the system.
The discovery of such a large overstatement came just a few months after Edward-Elmhurst announced $50 million in cuts.
"Appropriate and necessary changes have been implemented following a thorough review of accounting practices and procedures from independent, third-party consultants and industry experts," the hospital said in a statement.
Edward-Elmhurst Health said it worked closely with its auditors, Ernst & Young, to determine that the accounts receivable overstatement was an accounting error, and therefore the most recent financial statements for 2016/2017 will be restated to reflect the reduction in accounts receivable.
"This is an unfortunate situation but one that we're aggressively addressing and resolving. We understand the causes of the error and have addressed them. We have updated our accounting practices to ensure reliable financial statements going forward and have the right people in place to make the needed corrections," the hospital said in a statement.
Edward-Elmhurst Health said it is a strong and viable organization with a vision to transform the health care experience through safe, seamless and personal care. And that will continue to be its focus.
Edward-Elmhurst operates Edward Hospital in Naperville, Elmhurst Hospital and Linden Oaks Behavioral Health in Naperville.