Tag Archives: Operating Performance

Kaiser Permanente operating income grows as membership booms

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http://www.beckershospitalreview.com/finance/kaiser-permanente-operating-income-grows-as-membership-booms.html

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Oakland, Calif.-based Kaiser Permanente saw revenue and operating income increase in 2016, according to recently released bondholder documents.

Kaiser said operating revenue for its nonprofit hospital and health plan unit climbed 6.4 percent year over year to $64.6 billion in 2016. After factoring in expenses, Kaiser ended 2016 with operating income of $1.9 billion, up from $1.8 billion in the year prior.

Kaiser reported a strong year in health plan membership growth. The system ended 2016 with 10.7 million members, an increase of 4.2 percent from the year prior. After completing its acquisition of Seattle-based health plan Group Health Cooperative Feb. 1, Kaiser’s health plan membership now tops 11 million.

In 2016, Kaiser’s capital spending increased to $2.8 billion, up slightly from $2.7 billion in 2015. The system opened a new technology campus in Atlanta and 12 new medical offices and two new dental offices last year.

Fueled by strong nonoperating income, Kaiser reported net income of $3.1 billion in 2016, up from $1.8 billion in 2015.

CHS Chief Leads Discussion on Wall Street’s Healthcare Outlook

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http://www.healthleadersmedia.com/leadership/chs-chief-leads-discussion-wall-streets-healthcare-outlook?spMailingID=10315063&spUserID=MTY3ODg4NTg1MzQ4S0&spJobID=1082253801&spReportId=MTA4MjI1MzgwMQS2

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After a tough 2016, market analysts say that this year they expect a better investment climate in many healthcare sectors.

 

ACA repeal makes hospitals more vulnerable to closure

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http://www.fiercehealthcare.com/healthcare/hospital-closures-aca-repeal-makes-organizations-more-vulnerable?utm_medium=nl&utm_source=internal&mkt_tok=eyJpIjoiTldOaE1tUXlaRFUxTlRrMyIsInQiOiJVUFpNQ0tIKzF1c1pzU0gzbVpuaTNMdE8wbHUxY09LWW1mN1hoaHJ4QnVtVzdOWUExOXNqUXhPZkxTaUUwcFpHWW9ib21QdkRxanU1TzhRMXltUUNZN2dFdVdhSnpJWWpKbTVhMGkzSmlWT3R5UDVhMTJQUXhwSlF3eXNKT1VsRyJ9

hospital hallway

Millions of insured Americans could lose health insurance coverage if Congress and the new White House administration make good on their threat to repeal the Affordable Care Act. But they aren’t the only victims.

Many hospitals could also close as a result of the legislative action and the loss of government funds and increase in uninsured Americans who need care.

And these potential closures only add to the growing problem of vanishing hospital beds, according to a Bloomberg report. Indeed, more hospitals have shifted their focus from inpatient to outpatient care for financial reasons, acquiring or opening stand-alone facilities, physician practices and retail clinics.

“It’s been a very tough environment for hospitals,” Jason McGorman, a Bloomberg Intelligence analyst, said in the piece. “They have to get into other areas and businesses to free up cash and generate better margins than inpatient care, which has become a slow-growth business.

The #1 thing you need to know from the 2017 JP Morgan Healthcare Conference: Follow the money

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http://www.beckershospitalreview.com/hospital-management-administration/the-1-thing-you-need-to-know-from-the-2017-jp-morgan-healthcare-conference-follow-the-money.html

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If you want to understand the future of the $3 trillion U.S. healthcare industry, the lesson of the past is to ‘follow the money.’ And no one would argue that the place to do that is the infamous JP Morgan Healthcare Conference taking place this week in San Francisco.

While there are an estimated 4,000 people attending the conference, there’s roughly another 20,000 here for ‘off the grid’ meetings in every nook and cranny you can find. It is a surreal atmosphere in the form of the top executives from more than 450 private and public companies in biotech, pharmaceutical, medical device and technology, as well as healthcare providers, payers, private equity and venture capital firms and investment banks. Simply stated, this is where medicine’s flow happens.

With that said, roughly $1 trillion or one-third of annual U.S. healthcare spend flows through hospitals and healthcare delivery systems. So, if you want to understand what’s happening now and what will happen in the future, a good place to start is in the nonprofit healthcare provider track, where CEOs and CFOs of over 20 of our nation’s largest healthcare delivery systems presented their strategic plans in rapid fire 25-minute presentations.

Together these organizations represent over $100 billion or 10 percent of that $1 trillion spend. Incredible. The average organization presenting had over $6 billion in annual revenue, 15 hospitals, close to 30,000 employees and thousands of physicians on staff. Many of the name brands in healthcare including Downers Grove, Ill.-based Advocate Health Care, Irving, Texas-based CHRISTUS Health, Cleveland Clinic, Detroit-based Henry Ford Health System, Salt Lake City-based Intermountain Healthcare, Indianapolis-based IU Health, Oakland-based Kaiser Permanente, Cincinnati-based Mercy Health, New York-Presbyterian, Chicago-based Northwestern Medicine, Northwell Health in Great Neck, N.Y., and Robert Wood Johnson Barnabas Health based in West Orange, N.J., presented along with leading children’s hospitals such as Children’s Hospital of Philadelphia and innovative physician focused models such as Marshfield Clinic in Wisconsin and Geisinger Health System in Danville, Pa.

This provided an incredibly important snapshot of both the ground level view of what’s happening in the real world today as well as the bets being placed for the future. What follows is a high-level perspective of what was shared by these prominent provider organizations.

So, follow the money…and here’s the Top 10 Trends shaping how that money is flowing:

5 health systems with strong finances

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http://www.beckershospitalreview.com/finance/5-health-systems-with-strong-finances-011117.html

Market Power

Here are five hospitals and health systems with strong operational metrics and solid financial positions according to recent reports from Moody’s Investors Service, Fitch Ratings and S&P Global Ratings.

Note: This is not an exhaustive list. Hospital and health system names were compiled from recent credit rating reports and are listed in alphabetical order.

1. Minneapolis-based Allina Health has an “AA-” rating and stable outlook with Fitch and an “Aa3” rating and stable outlook with Moody’s. The health system has stable operating cash flow and favorable balance sheet metrics, according to Moody’s.

2. Coral Gables-based Baptist Health South Florida has an “AA-” rating and stable outlook with S&P. The system has maintained key balance sheet metrics and generated better-than-projected financial results in fiscal year 2016, according to S&P.

3. Christiana Care Health Services has an “Aa2” rating and stable outlook with Moody’s. The Newark, Del.-based system has solid liquidity and a history of above average financial performance, according to Moody’s.

4. Springfield, Ill.-based Hospital Sisters Health System has an “AA-” rating and stable outlook with S&P. The system successfully implemented a strategic plan, which helped it maintain a strong balance sheet while improving operations, according to S&P.

5. Madison-based University of Wisconsin Hospital and Clinics has an “Aa3” rating and stable outlook with Moody’s. The system has strong balance sheet resources and established clinical and academic market positions, according to Moody’s

S&P issues stable outlook for nonprofit healthcare despite looming ACA repeal

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http://www.beckershospitalreview.com/finance/s-p-issues-stable-outlook-for-nonprofit-healthcare-despite-looming-aca-repeal.html

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S&P Global Ratings‘ outlook on the nonprofit healthcare sector is stable in 2017, despite the sector facing a likely repeal of the ACA.

Although S&P’s ratings and financial medians support its outlook on the sector, the rating agency may change its outlook in the near future.

“…we see a growing potential for credit quality deterioration based on the latest results from some providers, and the possibility the outlook could turn negative after the new administration and Congress are sworn in, given their intention to drastically alter the ACA and many long-term legislative tenets of the overall healthcare delivery system,” said Kevin Holloran, an S&P Global Ratings credit analyst.

Even without any major legislative changes, many hospitals are facing renewed expense, revenue and volume pressures, as the initial positive effects of Medicaid expansion have ended. S&P said there has recently been an increase in the number of providers with weaker financial and operating performance.

“We believe the sector peaked in 2016 from a financial and operating metric perspective, although change is evolving slowly and is based on existing legislative healthcare framework,” said S&P.

The rating agency emphasized that 2017 is not all doom and gloom for the nonprofit healthcare sector.

“Continued implementation of fundamental operational improvement initiatives and strategies…should continue to provide financial flexibility under any type of payment system,” said S&P.

Two other major rating agencies, Moody’s Investors Service and Fitch Ratings, have also issued stable outlooks for the nonprofit healthcare sector in 2017.

How the ‘big 5’ payers performed financially in 2016

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http://www.beckershospitalreview.com/payer-issues/how-the-big-5-payers-performed-financially-in-2016.html

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The five largest U.S. health insurers — Aetna, Anthem, Cigna, Humana and UnitedHealth Group — saw a range of financial results throughout the first three quarters of 2016.

The big five health insurers will report their financial results for the fourth quarter of 2016, ending Dec. 31, early next year.

Catholic Health Initiatives pulls out of insurance business

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http://www.fiercehealthcare.com/healthcare/catholic-health-initiatives-pulls-out-insurance-business?utm_medium=nl&utm_source=internal&mkt_tok=eyJpIjoiTmprM1ptSXlNVEE0WWpCaCIsInQiOiJJd24rWE1HUTl5THZuZTRuaHJMOVViMlI2MFJwcSs4Q0hyaXFlcVJHc2J5WWhucGdmVkRQem9jM1dcL2NrVitKQStmdFZSeXVvMkp1S21qNWE4bHVcLzB6akJCOVAxRzROV2JcL3ZNbFFveVI5R2owbGRHdncwemtOWUpaaG8xVHhXMyJ9

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As more hospitals across the country consider launching their own health insurance plans, one big hospital operator is pulling out of the business.

Catholic Health Initiatives (CHI), a large nonprofit health system based in Colorado, no longer plans to develop a “wholly owned and nationally driven” insurance business, according to The Wall Street Journal. Instead, it’s going to sell portions of the health insurance business.

The provider, which operates 103 hospitals in 18 states, lost nearly $110 million during the last fiscal year, according to the article.

Dean Swindle, chief financial officer and president of its enterprise business lines for CHI, didn’t agree to an interview for the latest news,  but told the publication in April that “it’s tough in the health plan business. You lose money. You make mistakes. You plow forward. It takes cash.”

Partners HealthCare suffers $108M in operating losses in FY 2016

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http://www.healthcaredive.com/news/partners-healthcare-suffers-108m-in-operating-losses-in-fy-2016/432128/

Dive Brief:

  • Operating revenues at Boston-based Partners HealthCare increased 7% from the previous year to $12.5 billion, but $12.6 billion in operating expenses canceled out those gains, according to the health system’s financial statements.
  • The operating loss is the largest posted in the system’s 22-years of history, which has struggled financially since it acquired Neighborhood Health Plan in 2012, a Medicaid managed care subsidiary that had a $89-million operating loss two years ago.
  • A nursing strike and implementation of a new EHR system also contributed to poor financial performance at Partners in fiscal year 2016, according to the Boston Herald.

Why Catholic Health is bowing out of the insurance field

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http://www.healthcaredive.com/news/why-catholic-health-is-bowing-out-of-the-insurance-field/421923/

Dive Brief:

  • Tired of steep losses, Catholic Health Initiatives is looking to sell its health plan subsidiary, Modern Healthcare reported.
  • QualChoice Health, previously known as Prominence Health, sells Medicare Advantage and commercial plans to employers in six states.
  • CHI began buying up health plans three years ago as a way to adhere to the Affordable Care Act and compete with other carriers.