Another strong performance by Cone Health’s investment portfolio lifted the Greensboro health care system to a $68.3 million revenue surplus for the first quarter of fiscal 2024.
The excess of revenue over expenses in a for-profit organization such as Cone equals profit in a for-profit business. Cone’s fiscal year ends on September 30.
During the same period in the 2022-23 fiscal year, Cone reported a $42.3 million excess of revenue over expenses.
Cone reported Monday that it had $61.7 million in investment income for the first quarter, compared with $40.7 million a year ago. For-profit health systems such as Atrium Health, Atrium Health Wake Forest Baptist, Cone and Novant Health Inc. depend on investment income to boost their bottom line.
Cone also reported $8.7 million in “other revenue” and $251,725 in revenue from an unidentified joint venture.
People also read…
When the investment income component is excluded, Cone reported a loss of $2.49 million in income from operations, compared with a loss of $9.81 million a year ago.
Operating income increased 8.3% to $703.5 million. This was broken down into: a 7.3% increase in net patient service revenue to $626.2 million; an 18.7% jump in what it calls “premium” revenue to $51.8 million; and a 14.7% increase in other operating income to $25.5 million.
Meanwhile, Cone’s total spending increased 7.1% to just under $706 million.
Wages rose 0.7% to $250.6 million.
Ancillary income rose 1% to $76.2 million, while supply costs jumped 16.8% to $162.3 million. Cone spent $20.8 million on “purchased (contract) personnel” — mostly additional travel nurses — compared with $17.2 million a year ago.
Cone said the first-quarter total revenue does not include accruals for Medicaid-related HASP — Hospital Access and Stabilization Program revenue expected later in 2024.
The North Carolina Department of Health and Human Services said in November that Triad and Northwest North Carolina hospitals would receive a total of $566.8 million in federal funding, serving as the main carrot to win Medicaid expansion approval from the Republican-controlled state legislature. organ.
HASP funding is led by $219.8 million for Atrium Health Wake Forest Baptist Medical Center, $126.3 million for Moses Cone Hospital and $67.2 million for Forsyth Medical Center.
HASP payments are calculated based on payments for in-network Medicaid care to acute care hospitals, critical access hospitals, hospitals owned or controlled by UNC Health Care System, and ECU Health Medical Center. Baptist received a significantly larger HASP payment because it serves a larger Medicaid population base than Moses Cone and Forsyth.
The Medicaid expansion also came with additional costs for North Carolina’s health systems and hospitals, which agreed to pay the state’s 10 percent share of the expansion’s administrative costs, while the federal government pays the remaining 90 percent.
DHHS projects that about 600,000 North Carolinians will be eligible for Medicaid expansion services.
Cone said it paid $3 million in Medicaid assessment costs in the quarter, “while the increased patient volume and revenue associated with the expansion will require time to ramp up.”
Cone said it “experienced continued financial challenges throughout the industry during the first quarter, particularly related to supply costs, labor markets and general cost inflation.”
“Additional drivers for performance included high average inpatient length of stay, increased supply and pharmaceutical costs per case, and losses at Health Team Advantage and Triad Healthcare Network, primarily due to high medical claims costs.”
Cone reported a 1.4% increase to 95,696 in emergency room visits systemwide, as well as a 6.3% increase in outpatient visits to 308,604, a 14.7% decrease in telehealth visits to 8,364, and a 3% increase in surgical procedures to 10,572.
Medicare and Medicaid accounted for 48.1% of third-party reimbursements, along with 42.9% commercial and managed care. 8.4% other sources and 0.6% patient self-pay.
The report was posted on the Municipal Securities Rulemaking Board’s website, www.emma.msrb.org. Healthcare Systems’ quarterly financial reports are primarily aimed at bondholders and rating agencies. They are scheduled for release seven to eight weeks after the end of the reporting quarter.
Cone Health has more than 13,000 employees systemwide and five hospitals with 1,031 of its 1,231 beds in use as of Dec. 31.
