Partners reports $17m second-quarter loss
Blames winter for loss of $40-$50m in revenue
PARTNERS HEALTHCARE reported on Friday that the tough winter weather took a financial toll on the health care giant, with a steep drop in outpatient care contributing to a $17 million operating loss for the three-month period ending March 31.
Partners, the region’s largest employer, has been sputtering financially of late. The health care provider reported its first annual loss in 22 years last year, prompted largely by losses at its health insurance subsidiary Neighborhood Health Plan. For the year ending September 30, 2013, Partners said it lost $22 million.
Operating income rebounded to $74 million in the company’s first quarter ending December 31, 2014, but Partners was back in the red during the second quarter. The company said the harsh winter kept people from coming in to its hospitals for outpatient services, causing the loss of $40 million to $50 million in revenue.
“Our employees did a remarkable job keeping our hospitals open for patients this winter to receive patient care. However, the weather made it impossible for many patients to get to scheduled appointments – and that led to a significant decline in our providers’ operating results,” Peter Marker, the chief financial officer at Partners, said in a statement.
During the second quarter, Partners said total operating revenue increased $125 million, or 5 percent, to $2.8 billion. Operating expenses grew at a similar pace, and ended up exceeding income by $17 million. Revenue was up in most of Partners’ operating businesses, but expenses grew at an even faster pace. The cost of employee benefits increased 13 percent, or $20 million. A company press release said supplies and other expenses increased 2 percent, reflecting increased costs for specialty pharmaceuticals, blood products, and medical devices.For the first two quarters combined, Partners reported an overall gain of $21 million, including a non-operating loss of $35 million. For the same period a year ago, Partners reported an overall gain of $174, including non-operating income of $125 million. Non-operating revenue includes income from investments, financial hedging, and donor gifts.
Neighborhood Health Plan, which dragged down Partners’ financial results last year, saw its premium revenue grow $92 million in the second quarter due largely to a 24 percent increase in membership. Partners said the health plan’s Medicaid-related business “continues to be a source of concern and uncertainty,” noting that state-set rates for Medicaid patients have been inadequate.