Partners HealthCare, the parent of Massachusetts General Hospital, is the latest not-for-profit hospital system to lose $100 million-plus on its health plan.
Partners' health plan, Neighborhood Health, accounted for $104 million, nearly all of the operating losses in its fiscal 2016, ended Sept. 30.
The total $108 million operating loss was on revenue of $12.5 billion compared with an operating gain of $106.5 million in fiscal 2015 on revenue of $11.7 billion.
Partners' plan, which largely concentrates on Medicaid, racked up losses of more than $300 million over the past three years, said system CFO Peter Markell in a release. Partners first acquired the plan in 2012.
Premium revenue grew $475 million, or 23%, to $2.5 billion, predominantly because of huge Medicaid growth. Markell said commercial membership grew as well. The plan has about 454,000 members.
The Boston-based system has brought in new management to right the ship rather than exit the business, Markell was quoted in a Boston Globe article.
Partners' losses mimic those experienced by another provider newcomer to the managed-care business, Catholic Health Initiatives of Englewood, Colo.
After four years of struggles with its health plan, CHI, the nation's third-largest, not-for-profit hospital chain, is divesting the business following a loss of more than $100 million in 2016.
Excluding special items, Partners' operating margin was 0.2% in 2016 compared with 1.3% in 2015 as Medicaid, Medicaid and safety net reimbursement failed to keep pace with costs, Markell said.
Partners absorbed other costs as well. For example, a nurses' strike at Brigham and Women's Hospital was averted but preparations still cost the system $24 million, the company said.
Partners also was hit by a $26 million cost of exiting leases as it consolidated space.
