NYC Health + Hospitals concluded the third quarter of its fiscal year with an operating loss, but the public health system expects its financial picture to improve in coming months.
The 11-hospital system reported operating revenues of $6.7 billion in the three-month period ended March 31, up 1.8 percent from revenues of $6.6 billion in the same period of the year prior, according to unaudited financial statements.
Although the system's total operating revenues increased year over year, net patient service revenues declined 9 percent due to lower payments from the disproportionate share hospital and upper payment limit programs. NYC Health + Hospitals receives DSH payments for serving a high proportion of low-income patients. UPL payments help hospitals reduce losses on providing care to Medicaid patients.
NYC Health + Hospitals' revenue gains in the third quarter of fiscal year 2017 were offset by higher expenses. The system reported operating expenses of $7.4 billion in the third quarter of fiscal year 2017, up 6.4 percent from $6.9 billion in the same period of the year prior.
The system ended the third quarter of fiscal year 2017 with an operating loss of $673.3 million, compared to an operating loss of $349.6 million in the same quarter of fiscal year 2016.
Despite its financial performance in the third quarter, the system says it is still on track to shrink its budget gap this fiscal year.
"We look forward to concluding FY 2017 (on June 30) having exceeded the $779 million gap closing identified in the beginning of the year and expecting to close with $185 million cash on hand," the system said in a statement to Becker's Hospital Review. "And we have already identified $1.2 billion in gap-closing initiatives for FY 2018."
More articles on healthcare finance:
Texas Children's records $36.2M operating loss on insurance arm
5 healthcare CFOs in the headlines
Health system CEO pulls out $6M check to pay debts during budget hearing