Partners HealthCare reports 489% jump in FY18 operating income
- Partners HealthCare's operating income shot up 489% to $826.6 million in fiscal year 2018, despite a slump in annual revenue.
- Operating revenue for the year ended Sept. 30 was $13.31 billion, down 0.5% from $13.37 the prior year, according to financial results the nonprofit health system released Friday. A 43% drop in insurance premium revenue, to $1.4 billion, partially offset revenue gains from provider activity — up 8% to $12.1 billion.
- Net operating margin rose from 0.4% in FY 2017 to 2.3% this past year. After accounting for nonoperating income, Partners closed the year with net income of $827 million, up from $659 million the previous year.
The year included merger talks with both Care New England and Lifespan. Partners suspended negotiations with LifeSpan in October. That same month, the Rhode Island Department granted an expedited review of the proposed Partners-NCE merger.
And in May, Lifespan made a bid for New Hampshire-based Exeter Health Resources as part of a broader plan to strengthen its New England footprint.
Those and other mergers signal a changing healthcare landscape in Boston and the surrounding region. Massachusetts Attorney General Maura Healey last month approved the merger of Beth Israel Deaconess Medical Center and Lahey Health, with conditions, including not raising prices for seven years after the merger and remaining in the state's Medicaid program indefinitely.
Partners' financial results included $1.4 billion in losses from Medicare, Medicaid and Health Safety Net shortfalls, in line with shortfalls in 2017. The nonprofit health system, which includes Brigham and Women's Hospital and Massachusetts General Hospital, also reported more than $200 million in community benefits.
"Our health care delivery system and our insurance plan exceeded performance expectations, putting us in a stronger position to serve the health care needs of our patients going forward," Peter Markell, Partners' chief financial officer and treasurer, said in a statement. "While a 2-3% margin is slim compared to our peers across the nation, it enables us to reinvest in patient care and provide for the future capital needs of our hospitals and facilities."