- Partners HealthCare closed out its fiscal year, ended Sept. 30, with a $53 million increase in operating income, The Boston Globe reports. The result marks a dramatic turnaround from last year when the health system recorded its worst operating loss in its history.
- When income from investments and a newly acquired New Hampshire hospital are factored in, Partners saw a net gain of $659 million.
- The Boston-based health system suffered an $108 million operating loss in fiscal year 2016, fueled largely by losses at Medicaid managed care subsidiary Neighborhood Health Plan.
NHP, which had an $89 million operating loss three years ago, has been a financial drag on Partners since its acquisition in 2012.
However, conditions started to look up this year after NHP stopped enrolling new members of MassHealth, the state Medicaid program. It also focused on businesses that were already paying off — such as employer health plans — while holding down costs of insuring members.
For FY 2017, Partners had $13.4 billion in revenue, up 7% from the previous year. About $2.5 billion derived from NHP. The bulk came from hospitals and physicians.
Partners isn’t the only large health system to take a chance on an insurer in recent years. Catholic Health Initiatives bet on QualChoice Health, which sells Medicare Advantage and employer-sponsored plans, in 2014, and has struggled with financials ever since. The Englewood, Colo.-based health system has been trying to sell the health plan since last year.
It appears Partners’ health plan strategy could pay off, though, if business continues to shift away from Medicaid to more lucrative employer-sponsored plans. Still, uncertainty around the ACA and other healthcare reforms could continue to hurt health systems that have bought into health plans. While the consolidation trend shows no signs of slowing, health systems may opt for deals with other providers rather than matching up with a payer.