Cleveland Clinic ended the first quarter of 2018 with operating income of $47.6 million, down 22 percent from $60.7 million in the same period a year earlier, according to recently released bondholder documents.
Cleveland Clinic's revenues increased to $2.12 billion in the first quarter of this year, up 2.6 percent from $2.07 billion in the first quarter of 2017. However, higher expenses offset the system's revenue gains. Cleveland Clinic said operating expenses climbed 3.3 percent year over year.
During the first quarter of this year, Cleveland Clinic saw notable increases in expenses related to salaries, wages and benefits, as well as pharmaceutical and supplies costs. To address the growth in expenses, Cleveland Clinic said it is developing and implementing cost management and containment plans as part of an ongoing initiative launched in 2013.
Cleveland Clinic commissioned a Care Affordability Task Force in 2013 to analyze the system's cost structure and identify cost and efficiency opportunities. Cleveland Clinic said the the task force helped roll out initiatives that resulted in more than $860 million of improvements in the system's cost structure between 2014 and 2017.
After factoring in nonoperating gains, which dropped 76 percent year over year, Cleveland Clinic recorded net income of $106.5 million in the first quarter of 2018, compared to $308.6 million in the same period of the year prior.
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