Partners HealthCare loses millions after harsh Boston winter
System lost $17.5 million in the second quarter, as 9 feet of snow kept some patients from seeking treatment.
Image of snowy Boston Commons in January 2015 from Flickr.
Boston’s worst winter in recorded history took its toll on Partners HealthCare, as the endless snow caused the health system to lose millions.
The parent health system of Massachusetts General and Brigham and Women’s hospitals lost $17.5 million in the three months that ended March 31, the second quarter in its September to September fiscal year. Partners’ revenue was up 5 percent to $2.78 billion, but expenses grew by 6 percent, and the winter’s 9 feet of snow kept some patients from coming into the hospitals and clinics.
The loss was “primarily attributable to a decline in outpatient activity during the harsh winter months, which resulted in lost revenue estimated at $40 to 50 million,” the academic health system said in its quarterly financial report.
Partners’ net patient service revenue increased $74 million, or 4 percent, to $1.8 billion in the second quarter, with inpatient hospital care partially offset by a continued payer shift mix to public payers and the weather-related decline in outpatient utilization. Research revenue held steady at $389 million.
[Also: Partners HealthCare names new CEO after merger fails]
“Our employees did a remarkable job keeping our hospitals open for patients this past winter to receive patient care,” said Peter K. Markell, CFO and treasurer. “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.”
On the other hand, Partners’ Neighborhood Health Plan brought in $1 million in income thanks to a $21 million reduction in medical claims due to the amortization of a premium deficiency reserve.
Neighborhood Health Plan, which Partners acquired in 2012, is performing well, Markell said, but could be affected by changes in Medicaid.
Like Healthcare Finance on Facebook
“Medicaid-related business continues to be a source of concern and uncertainty,” he said. “NHP and other Medicaid managed care organizations must work closely with the state over the next six months to ensure that adequate rates are set for the future, reflecting the health of the population actually expected to be served as MassHealth re-determines eligibility.”
Despite those insurance challenges and the winter slump in outpatient care, Partners is on track to be profitable for the year. For the full six months of the fiscal year, the health system had a $56.5 million operating income.
Twitter: @AnthonyBrino
