Dignity Health reports FY18 income boost
- San Francisco-based Dignity Health, one of the nation's largest health systems, reported operating income of $529 million in fiscal year 2018, a significant improvement from the $67 million operating loss the year prior.
- The health system increased revenue to $14.2 billion from roughly $12.9 billion last year.
- Outpatient services declined slightly for 2018. About 42% of net patient service revenue was attributable to outpatient services, a slight decline from 43% in 2017. The opposite was true for inpatient services, bucking the industry trend. About 58% of revenue was tied to inpatient services, a small increase from 57% last year.
The strong financial results come as Dignity closes in on its merger with Englewood, Colorado-based Catholic Health Initiatives.
The deal would create the largest nonprofit system in the country based on operating revenue at $28.4 billion, but the transaction — agreed upon in December — still awaits regulatory approval. CHI expects the deal to close by the end of this calendar year.
Dignity's "successful" year-end financial results mark the second year of the system's "multi-year operational improvement plan to adjust its revenue and cost structure to meet the changing demands and reimbursement trends in the health care marketplace," a statement on the results said.
Dignity's likely soon-to-be partner reported volume declines in its year-end results. However, CHI's CFO said the health system was able to mitigate those losses through revenue cycle improvements and cost reductions.
The year-end results come as major health systems continue to consolidate.
Last week two top health systems in Texas said they planned to merge, creating a behemoth health system in Texas spanning from Dallas to Houston, worrying some economists about the effects on consumers and price.
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