Tag Archives: PinnacleHealth

Adventist Health’s net income nears $230M in FY17

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https://www.healthcaredive.com/news/adventist-healths-net-income-nears-230m-in-fy17/522093/

Dive Brief:

  • Adventist Health’s net income grew 366% to $229.8 million in fiscal year 2017, up from $169.1 million in 2016.
  • Operating income was $203.9 million for the year ended Dec. 31, an 11.6% increase from $812.8 million the previous year, according to recent released financial documents.
  • The 90-hospital, Roseville, CA-based nonprofit health system reported $4.1 billion in revenue, a 5.8% gain over 2016’s $3.9 billion.

Dive Insight:

Adventist’s rosy performance gain reflects at least a short-term upward trend in financials as nonprofits show some signs of bouncing back from several years of rough currents fueled by shrinking volumes and reimbursement cuts. Geisinger Health System saw net income jump nearly $200 million to $324.9 million in the first half of fiscal year 2018, compared with the prior year, providing an excess margin of 9%.

Mayo Clinic reported $707 million in operating income and $12 billion in revenue for 2017, an increase of more than $225 million and $1 billion, respectively, from the previous year. Meanwhile, UPMC’s net income rose to $1.3 billion last year, spurred by strong operating and investing results and integration of UPMC Pinnacle into UPMC operations. Operating revenue and operating income also increased.

Adventist is looking to expand its brand footprint. Earlier this month, the system inked a deal to acquire Florida-based 421-bed Munroe Regional Medical Center from Community Health Systems. It has also broadened its reach in northern California through an affiliation agreement with Fremont-Rideout Health Group, which become effective at the first of this month.

Net patient service revenue at Adventist was $3.8 billion, up from $3.6 billion a year earlier. Total expenses rose to $3.9 billion, versus $3.7 billion in 2016. Of that, $1.9 billion was for employee compensation. The system recorded total cash and investments of $1.9 billion for last year.

Occupancy of licensed beds stayed mostly flat at 55.6% across the system. Average length of stay was down slightly and outpatient revenues as a percentage of gross patient revenue was down to 44.7% from 45.1% in 2016.

 

UPMC bonds would fund major health care spending in midstate

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http://www.pennlive.com/news/2017/08/upmc_bonds_would_fund_major_he.html

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Health care giant University of Pittsburgh Medical Center plans to spend $235 million in the Harrisburg, York and Lancaster areas in 2018. Much of it would go toward a new hospital in York, with some also spent at three other midstate hospitals.

Another $235 million could “potentially” go toward refinancing the loan Harrisburg-based PinnacleHealth System used for its recent purchase of four hospitals. UPMC and PinnacleHealth are in the process of merging, although the transaction still needs government approval.

The building plans were revealed Thursday during a public hearing on raplidly-expanding UPMC’s application for a bond issue through the Pennsylvania Economic Development Financing Authority. UPMC expects to receive $750 million from the bonds,

About $350 million would be used to pay off prior debt and about $400 would go toward new building projects and renovations. All told, UPMC plans to spend $900,000 million on building projects and related upgrades in western and central Pennsylvania in 2018, according to UPMC’s Simon Goehring, who represented UPMC at Thursday’s hearing.

UPMC now covers more than half the state — much more than any other system.

While PEDFA serves as a conduit for selling the bonds, there is no taxpayer funding involved in the bond issue or the funds UPMC would receive, PEDFA Executive Director Steve Drizos said. Going through PEDFA will enable UPMC to sell bonds that are exempt from state and federal interest taxes, resulting in lower costs for bond buyers, and lower financing costs for UPMC.

At Thursday’s legally-required public hearing, Dan Dorsheimer of AIA Benefits Resource Group asked whether UPMC plans to stops accepting any health insurance plans at the central Pennsylvania health care facilities that will come under its umbrella as a result of the PinnacleHealth merger.

Goehring replied that UPMC has no short-term plans to shut out any insurers, but “I can’t say in the long run how things will turn out.” UPMC is unusual among health systems in that it also owns a health insurance company.

In the Pittsburgh region, a dispute between UPMC and health insurer Highmark resulted in UPMC no longer accepting Highmark coverage.

Dorsheimer, whose firm manages employer health benefits and also is an insurance broker, said it’s “disruptive” and detrimental to health care consumers when any local health care providers won’t accept their health insurance.

“You witnessed what went on in Pittsburgh. It’s been very disruptive,” he said following the hearing.

The $235 million that will be spent in the midstate will be concentrated at facilities including Carlisle Regional Medical Center, York Memorial Hospital, which is being replaced, Lancaster Regional Medical Center, and Heart of Lancaster Regional Medical Center. Those are the four recently acquired by PinnacleHealth for $231 million.

PinnacleHealth is one of the region’s largest health care providers

Goehring also said UPMC also plans to spend some of the bond funds on a new hospital in the Pittsburgh area. Some also will be spent in north central Pennsylvania, where UPMC has acquired or plans to acquire several hospitals including the former Susquehanna Health.

A PEDFA committee has already approved the UPMC bond application. Final approval comes from Gov. Tom Wolf. Historically, the governor has typically approved applications that have been approved by the executive board, Drizos said.

UPMC moves ahead on purchase of PinnacleHealth

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http://www.healthcaredive.com/news/upmc-moves-ahead-on-purchase-of-pinnaclehealth/449305/

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Dive Brief:

  • UPMC have reached a definitive agreement to with Harrisburg-based PinnacleHealth to be acquired, Philly.com reports.
  • The deal paves the way for UPMC to expand its market share in central Pennsylvania and compete directly with the University of Pennsylvania Health System, which owns Lancaster General Health.
  • Last month, Pinnacle bought four central Pennsylvania hospitals from Community Health Systems, a Tennessee-based hospital chain. The purchase included Lancaster Regional Medical Center and Heart of Lancaster Regional Medical Center.

Dive Insight:

The deal, first announced in March, is UPMC’s largest ever and the first to involve an entire health system. Previous purchases have involved single hospitals, the most recent being Sunbury Community Hospital and Lock Haven Hospital from Quorum Health. Those hospitals will become part of Williamsport, Pa.-based UPMC Susquehanna, which was added to the UPMC system last fall.

With Pinnacle’s acquisition now on track, UPMC also stands to boost its health insurance product line, which accounted for close to half of its 2016 operating revenue. The move will pit UPMC Health Plan against Capital BlueCross and Highmark, which together have 75% of the central Pennsylvania market. Aetna holds the rest.

Gaining a foothold in the Harrisburg region could help to compete with Highmark, which four years ago bought Pittsburgh-based Allegheny Health Network, putting it in direct competition with UPMC’s medical and coverage operations.

Merger and acquisition activity has kept up a steady pace this year, with no signs of abating. Reasons for deals include declining admissions, rising costs and a desire to expand into new regions or service lines.

In May, Cleveland Clinic and Dover, Ohio-based Union Hospital signed a letter of intent to merge Union into Cleveland Clinic. The move will expand Cleveland Clinic’s footprint into southern Ohio, while bringing new services and resources to Union, officials said at the time.

Cleveland Clinic CEO Toby Cosgrove, who is stepping down later this year, said in April that consolidation and a greater focus on telemedicine would help providers transition from volume to value payment as healthcare reform continues to evolve.

UPMC expects to complete the acquisition September 1, pending regulatory approvals. For the fiscal year ended June 30, 2016, Pinnacle reported revenue of $1.05 billion.