Nonprofit Catholic health system Trinity Health on Tuesday reported a 7.1% increase in revenue to $311 million in the first quarter of its fiscal year 2019, which ended Sept. 30. Trinity had a $20.4 million increase in operating income and finished the quarter at $100.4 million. The operating margin of 2.1% improved on last year's 1.8%. Operating cash flow stayed at almost 8%.
The Livonia, Michigan-based health system's expenses increased by 6.7% or $291 million to $4.6 billion. Nearly one-third of those added expenses came from the purchase of MacNeal Hospital and its entities from Tenet Healthcare.
The health system also announced Tuesday CEO Richard Gilfillan will step down in June, to be replaced by current Chief Operating Office Michael Slubowski.
Trinity Health said it "continues to undertake targeted efficiency initiatives to improve performance and address unfavorable industry trends," including in the areas of labor, productivity, supply costs and clinical and administrative operations.
Trinity Health's Loyola University Health System purchased the 368-bed, Berwyn, Illinois-based MacNeal Hospital and its entities in March, generating $86 million in revenue. Trinity said the purchase helps Loyola's population health and community health efforts.
Patient volume and payment increases, as well as a better case mix, also helped revenue. Volume increased in 13 of Trinity's 19 regions compared to a year ago. The health system runs 94 hospitals and 129 continuing care facilities in 22 states.
Trinity's positive results are different from its final fiscal year 2018 numbers. The company reported an $18 million loss in operating income compared to the previous year. Plus, the system faced significant charges for converting to a single EHR, which cost $108 million in FY18.
Meanwhile, on the flip side of the MacNeal Hospital deal, for-profit Tenet faced a net loss and lower patient admissions in the quarter. Tenet Health saw admissions fall on a same-facility basis 2% during the quarter, while outpatient visits dropped 0.4%.