Minneapolis-based Allina Health reported a $154.4 million operating income (9.6% operating margin) in the third quarter of 2024, a substantial increase from the $109.9 million operating loss (-8.8% margin) posted over the same period last year, according to its Nov. 14 financial report.
The system reported revenues of $1.6 billion for the three months ended Sept. 30, a 28.7% increase over the same period last year. Patient service revenues increased 8.4% to $1.2 billion. Other operating revenue increased by 274.4% to $355.5 million.
Total expenses reached $1.4 billion in the third quarter, a 6.9% increase year over year. Salaries and benefit expenses increased 0.7% to $844.9 million. Supply and service costs increased 24.3% to $410 million.
The system posted a net income of $237.3 million in the third quarter, up from a net loss of $135.7 million over the same period last year.
Through the first three quarters of 2024, Allina has posted an operating income of $42.7 million (1% margin), up from an operating loss of $334.2 million (-8.9% margin) over the same period last year. Allina's net income through the first nine months of 2024 is $213.6 million, up from a net loss of $229 million over the same period in 2023.
Allina said in the report that since the beginning of April 2023, when it partnered with Huron Consulting Group, it has made "encouraging progress in transforming performance through numerous key initiatives including reducing spending on agency staff, reducing discretionary spending and more."
"Allina Health has made a concerted effort to expand access to skilled nursing facilities, reduce delays in patient transfers when appropriate and, ultimately, ensure patients receive the right level of care at the right place," the system said. "This creates a better patient experience and improves access throughout the system. Since the start of April 2023, Allina Health decreased the average length-of-stay from 5.2 days to an average of 4.9 days for 2023, and an average of 4.8 days as of Sept. 30."
CFO Doug Watson told Becker's in September that strategic partnerships with Optum and Quest Diagnostics have been a key part of Allina's turnaround strategy. Effective May 5, Allina outsourced its IT and revenue cycle functions to Optum, part of UnitedHealth Group. About 2,000 employees moved to Optum in the process. Allina sold some of its lab assets to Quest Diagnostics in a deal that was completed in September.