Trinity Health recorded higher revenue in the first half of fiscal year 2019 than in the same period of the year prior, but the Livonia, Mich.-based health system ended the first two quarters of the current fiscal year with a net loss, according to unaudited financial documents released March 12.
During the first six months of fiscal 2019, Trinity reported operating revenue of $9.5 billion, a 5.5 percent increase over the same period a year earlier. The boost was partially attributable to Trinity's acquisition of MacNeal Hospital in Berwyn, Ill., from Dallas-based Tenet Healthcare. Trinity said the Illinois hospital generated $174.6 million in the six months ended Dec. 31. Growth in patient volumes and payment rates also helped push Trinity's revenue higher.
Increases in operating expenses outpaced Trinity's revenue growth. Expenses climbed 6 percent year over year to $9.3 billion in the first six months of fiscal 2019. The MacNeal Hospital acquisition accounted for roughly 2 percent of the increase. The remaining growth was primarily due to higher labor and supply costs.
Trinity ended the first half of fiscal 2019 with operating income of $140.3 million, down from $177.9 million in the same period of the year prior.
Trinity's operating margin declined from 2 percent in the first half of fiscal 2018 to 1.5 percent in the first half of fiscal 2019. The system's cash flow margin dropped from 7.9 percent to 7.2 percent. Trinity said increased claim denials by payers negatively affected its margins in the first two quarters of the current fiscal year.
After factoring in nonoperating losses of $419.6 million, including investment losses due to turbulent financial markets, Trinity reported a net loss of $301.5 million in the first half of fiscal 2019. That's compared to the first six months of fiscal 2018, when the system posted net income of $806.4 million.
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