Dive Brief:
- Salt Lake City-based Intermountain Health last week reported $157 million in operating income for the first nine months of 2023, a 45% decrease from the prior-year period when the health system posted an operating income of $285 million.
- Revenues increased as the operator experienced broad demand for patient services driven by a 20% boost in patient services revenue, but they only slightly surpassed operating expenses — which also rose over the first nine months of 2023. The health system reported a 1.3% operating margin, down from last year’s 2.8%.
- While Intermountain’s investment income rebounded since 2022 losses, it overall reported lower non-operating income levels, which were 60% lower than in the first nine months of last year.
Dive Insight:
Intermountain Health formed through a merger between Intermountain Healthcare and SCL Health in the spring of last year.
The combination of Intermountain’s 25 hospitals and SCL’s eight created a $12 billion operation, managing 33 hospitals and hundreds of clinics across seven states.
During the first nine months of the year, demand for patient services drove Intermountain’s revenue to $11.9 billion.
The health system experienced increased clinic visits, adjusted admissions and outpatient visits which rose 15%, 6.4% and 6.7% year over year, respectively.
Intermountain added to its full-time staff, employing 6.5% more workers in the first nine months of 2023 than in the same period last year. Expenses swelled to total $11.2 billion, with salaries and benefits making up 46.3% of operating costs.
The cost of medical claims also rose 8.8%, compared to the same period in 2022, to total $2 billion. Nonprofit and for-profit hospital operators have recently warned of increasingly aggressive behavior from insurers that have caused claim denials to go up, increasing hospitals’ cost-per-bill in pursuit of payment.
Most recently, CommonSpirit Health announced a net loss of $738 million dollar for the first quarter of its fiscal year 2024, which the company attributed in part to low reimbursement rates from payers.
Intermountain’s investments did rebound compared with the same period in 2022. Last year, the health system reported losses of $2.2 billion. This year, the company took in $791 million in investment income.
Still, Intermountain ended the nine-month period with a net income of $912 million, down from its $2.2 billion reported during the prior-year period.