Higher admissions, better case mix drive Cleveland Clinic Q3 revenues
Cleveland Clinic enjoyed a 9% revenue increase in the third quarter compared to a year ago and finished September with $2.2 billion in revenues for the quarter.
The Cleveland-based nonprofit health system credited higher net patient service revenue, including a bump in admissions and a better case mix, for the improved numbers.
- Cleveland Clinic had a 76% increase in operating income for the quarter compared to a year ago and finished with nearly $70 million in operating income. That's a significant change from the system's Q2 numbers, which included an 80% drop in operating income.
Increased patient traffic drove Cleveland Clinic's Q3 report, despite other hospitals complain about sagging inpatient numbers.
The nonprofit system reported a slight increase in inpatient admissions, or acute care, and a slight decrease in post-acute care. Patients spent more time in the hospital with more than 671,000 inpatient days compared to about 657,000 for acute care a year ago.
Cleveland Clinic saw an increase in the number of surgical facility cases for both inpatient and outpatient care. Overall, the health system's surgical facility cases increased from about 160,000 a year ago to nearly 163,000 this year.
Emergency room visits have also risen from 485,000 to almost 505,000 over the past year. Outpatient evaluation and management visits increased from 3.3 million through September 2017 to 3.4 million this year.
Not all health systems have enjoyed a strong Q3. The Bronx, New York-based Montefiore Health System reported a 7.3% revenue increase and 58% operating income jump. That system also credited net patient service revenue for its improved numbers.
However, Phoenix-based Banner Health's net income dropped 44% in the first nine months of the year, though it improved revenues. Franklin, Tennessee-based Community Health Systems also saw a 6% decrease in net operating revenue in Q3 after seeing lower patient volume. The giant system reported a net loss of $325 million in the quarter, compared to a loss of $110 million last year.
A recent Fitch Ratings report predicted a stable environment for healthcare companies but warned that some may have trouble gaining profitability. As an example, a different Fitch report on nonprofit hospitals and health systems in Q3 showed 11 security rating upgrades and 11 downgrades.
While hospitals and health systems face varied results, one segment of healthcare that's thriving is the insurance industry. For instance, UnitedHealth Group, which includes the country's largest commercial payer UnitedHealthcare, enjoyed a 12% revenue increase and finished the quarter with $56.6 billion in revenues.