Despite a boost in total revenue, UMass Memorial Health Care suffered operating income losses caused by a massive rollout of a new electronic health record system.
The implementation of a $700 million EHR system contributed to a $31 million loss in fiscal 2016. The system reported $40.7 million in operating income this year compared with $72.2 million last year.
UMass Memorial's systemwide switch to an Epic Systems Corp. network contributed to $26.1 million in additional expenses in fiscal 2016. The rollout has cost the system a total of about $64 million so far, according to the earnings report. The rollout has added $23.3 million in labor expenses, $23.9 million in consulting fees and $14.2 million in implementation fees.
The system expects to spend $700 million over the next decade to upgrade its EHR system. The rollout should be complete by fiscal 2018.
UMass did see positive total revenue margins. The Worcester, Mass.-based system reported a 5.8% increase in total revenue for its fiscal year ended Sept. 30. UMass Memorial earned $2.37 billion in total revenue this year, compared with $2.24 billion last year.
Overall, total expenses for UMass Memorial for 2016 rose by 6.8% to $2.33 billion compared with $2.18 billion last year. The rise was attributed mostly to an increase in supplies and labor costs.