Trinity Health may initially be losing money on the September 2022 acquisition of MercyOne, but the 16-medical-center network is fast becoming a key revenue source for the Livonia, Mich.-based health system, COO Ben Carter told investors.
While the contribution of new acquisitions in fiscal 2023, largely driven by Des Moines, Iowa-based MercyOne, was a $128 million operating loss, or a -8.1% operating margin, MercyOne was now a $3 billion-plus revenue-producing division, making the service area the second-largest region within the system, Mr. Carter said on the Oct. 19 call. Trinity Health also acquired Davenport, Iowa-based Genesis Health System in March and folded that into MercyOne.
The $633.9 million MercyOne transaction came about as Trinity Health bought the 50% interest it didn't already own, previously belonging to Chicago-based CommonSpirit.
"Honestly, it was clunky and it was difficult to be one by having two different parents," Mr. Carter said of the decision to buy out CommonSpirit. "We are now able to begin the process of integration of the common platforms."
As the integration of MercyOne, which has over 120 sites of care, continues, it will become an even more important source of revenue, added CFO Dan Isacksen.
"The strategy was and remains for us to actually have the ability to improve the performance rather than just accepting losses and capital requests without any control," he said.