Unburdened by a money-losing contract for Arizona health exchange customers, Franklin, Tenn.-based Iasis Healthcare returned to profitability in its fiscal first quarter ended Dec. 31.
The 18-hospital company posted net earnings from continuing operations of $2.2 million in the quarter on revenue of $839.9 million. That compares with a loss from continuing operations of $3.3 million on revenue of $802.8 million in the year-earlier quarter.
Iasis, which has a large managed-care business, exited the Arizona exchanges on Dec. 31. That business contributed $10.8 million to a $76.3 million operating loss in its fiscal fourth quarter and another $8.8 million in the third quarter. It was after that third-quarter loss that Iasis informed Arizona regulators that it was leaving the state's exchange business.
Excluding the impact of the Arizona exchange plan, Iasis shrank its medical loss ratio to 85.3% compared to 89.5% in the prior-year quarter. That ratio, excluding the impact of the Arizona exchange plan, was 91.7% for the fourth quarter ended Sept. 30.
“Our first quarter results reflect significant improvements at our managed care operations, resulting from our recent efforts to enhance clinical and cost efficiencies.” Said Iasis CEO W. Carl Whitmer.
Even with the Arizona exchange customers gone, membership across all managed care products increased 8.5% to 681,300 lives served as of Dec. 31, compared to the year-earlier period. Managed care revenue jumped 8.8% in the quarter to $340.7 million.
Admissions at Iasis hospitals increased just 0.3% in the quarter, while revenue rose 2% to $499.2 million.
Adjusted EBITDA in the first quarter totaled $61.8 million compared with $57.4 million in the prior-year quarter.