Downers Grove, Ill.-based Advocate Health Care saw net income fall as expenses climbed in the third quarter of fiscal year 2017.
The nonprofit health system reported net income of $169.6 million in the third quarter ended Sept. 30, according to unaudited financial documents. That is down 26.8 percent compared to $231.8 million in the third quarter of 2016. Advocate Health Care attributed the decrease to lower return on investment in the most recent quarter compared to the same period last year.
At the same time, the system reported a 13.8 percent increase in expenses. Advocate Health Care recorded expenses of $1.5 billion in the third quarter of 2017, up from $1.3 billion reported in the same quarter of 2016. The uptick in expenses reflected inflation increases and labor costs, with Advocate Health Care posting a one-time expense of $10 million for employees accepting early retirement plans.
Advocate Health Care also saw revenue increase 13.8 percent to $1.6 billion in the third quarter of this year compared to the same period in 2016. When excluding the elimination of revenue under contracts with the system’s physician arm, Advocate Physician Partners, total revenue reflected higher admissions and medical group visits, among other factors.
Advocate Health Care ended the third quarter of 2017 with operating income of $56.2 million, up $7.2 million from the same period in 2016. The system attributed the change to higher inpatient volumes and payment rates. Advocate Health Care achieved the same operating margin for the third quarter of this year as the third quarter of 2016: 3.6 percent.