Boston-based healthcare giant Partners HealthCare (pdf) reported an operating loss of $2 million in its fiscal year fourth quarter ended Sept. 30 due to a $42 million tax associated with Massachusetts' recent healthcare cost containment law.
In August, Gov. Deval Patrick (D) signed a healthcare bill that limits healthcare spending in the state. Under the law, hospitals in the state must limit spending increases to a rate that is no greater than the state's gross state product through 2017.
Partners, the parent organization of Massachusetts General Hospital and Brigham and Women's Hospital, cited the one-time, $42 million charge as a condition of the law. Massachusetts collected $60 million total from Partners, Boston Children's Hospital and Beth Israel Deaconess Medical Center to fund programs under the cost containment law, according to a Boston Globe report.
Despite the one-time tax, Partners still reported major gains in both revenue and profit in the fourth quarter. Investments helped the health system record an overall profit of $33 million in the fourth quarter, compared with a loss of $122 million in the fourth quarter of 2011. On the year, Partners posted an operating margin of 2.1 percent
Partners CFO and Treasurer Peter Markell said in a news release that the non-profit system's operating financials were "reasonably strong," and the system plans to ramp up its efforts to care for the chronically ill.
"Partners, like many other healthcare providers, is taking on more financial risk in our contracts with health insurance companies," Mr. Markell said. "In order to be successful in this environment, we must continue to focus on managing the health of our patient populations — particularly those patients with complex medical conditions."
In August, Gov. Deval Patrick (D) signed a healthcare bill that limits healthcare spending in the state. Under the law, hospitals in the state must limit spending increases to a rate that is no greater than the state's gross state product through 2017.
Partners, the parent organization of Massachusetts General Hospital and Brigham and Women's Hospital, cited the one-time, $42 million charge as a condition of the law. Massachusetts collected $60 million total from Partners, Boston Children's Hospital and Beth Israel Deaconess Medical Center to fund programs under the cost containment law, according to a Boston Globe report.
Despite the one-time tax, Partners still reported major gains in both revenue and profit in the fourth quarter. Investments helped the health system record an overall profit of $33 million in the fourth quarter, compared with a loss of $122 million in the fourth quarter of 2011. On the year, Partners posted an operating margin of 2.1 percent
Partners CFO and Treasurer Peter Markell said in a news release that the non-profit system's operating financials were "reasonably strong," and the system plans to ramp up its efforts to care for the chronically ill.
"Partners, like many other healthcare providers, is taking on more financial risk in our contracts with health insurance companies," Mr. Markell said. "In order to be successful in this environment, we must continue to focus on managing the health of our patient populations — particularly those patients with complex medical conditions."
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