Boston-based Partners HealthCare saw its operating income rise in the third quarter of fiscal year 2018 despite a decline in revenues, according to recently released financial documents.
Partners saw operating revenues decline 3 percent year over year to $3.3 billion in the third quarter of 2018. The health system's growth in provider revenue was offset by a 64 percent decline in insurance revenue. Partners said the decrease in insurance revenue was attributable to the transition of members from Medicaid managed care programs into the new MassHealth ACO program in March.
After accounting for a 5 percent decrease in expenses, Partners ended the third quarter of fiscal 2018 with operating income of $91 million. That's compared to the third quarter of fiscal year 2017, when the health system posted operating income of $50.4 million.
The health system reported a 2.7 percent operating margin for the three months ended June 30, up from a 1.8 percent margin in the same period of 2017.
"Strong performance by our hospitals, physicians and insurance operation coupled with a continued focus on expense management through our Partners 2.0 initiative has enabled us to realize an operating margin within our 2 to 3 percent target," said Peter K. Markell, treasurer and CFO of Partners HealthCare.
After factoring in nonoperating gains of $183.7 million, Partners ended the third quarter of fiscal 2018 with net income of $274.6 million. That's compared to the same period of 2017, when the system reported nonoperating gains of $4.5 million and net income of $54.9 million.
More articles on healthcare finance:
Michigan hospital blames 'aggressive, direct competitor' for financial troubles
Tennessee hospital to scale back services ahead of Sept. 15 closure
Former CHS hospital boosts Rennova's revenue