Higher labor, supplies costs take toll on Cone Health's operating income

Cone Health saw revenue increase in fiscal year 2016, but the Greensboro, N.C.-based system ended the period with lower operating income than in FY 2015.

In FY 2016, which ended Sept. 30, Cone Health recorded revenue of $1.68 billion, up from $1.55 billion in the year prior, according to recently released bondholder documents. The financial boost was largely attributable to an increase in net patient service revenue, which climbed nearly 5 percent year over year to $1.56 billion.

Cone Health's operating expenses also rose in FY 2016. The system's expenses totaled $1.65 billion in FY 2016, up from $1.49 billion in the year prior. Cone Health reported an 8.7 percent year-over-year increase in labor costs and an 11.4 percent year-over-year increase in supplies costs.

The system ended FY 2016 with operating income of $33.29 million, down from $55.79 million in FY 2015.

After factoring in nonoperating expenses and investment income, Cone Health recorded net income of $59.85 million in FY 2016, up from $45.98 million in the year prior.

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