Cost-cutting and business from acquired Connecticut hospitals vaulted Trinity Health to a solid operating gain in its fiscal first half.
The Catholic-sponsored health system, one of the nation's largest not-for-profit hospital systems, posted operating income before special items of $109.9 million in its 2017 fiscal first half that ended Dec. 31. That compared with operating income of $38.2 million in the same period a year earlier, the system said in a financial disclosure this month.
Revenue in the first half jumped 10%, or $783.1 million, to $8.7 billion from $7.9 billion posted in the first half of fiscal 2016. In its financial disclosure this month, Trinity said the addition of three Connecticut hospitals included in the fiscal 2017 total contributed about half of its revenue gain.
Trinity, based in Farmington Hills, Mich., has been ratcheting down on labor and supply costs through an initiative called "transforming operations" that also involves clinical performance improvements.
Excluding the Connecticut acquisitions, margins at Trinity operations jumped to 1.4% in the first half of its fiscal 2017 compared with 0.6% in the same period last year. With the Connecticut hospitals, Trinity's first-half margin was 1.3%, the company said.
Trinity also enjoyed big year-over-year gains in investment income. First-half investment and non-operating income totaled $650.1 million compared to a loss of $127.8 million in the year-earlier period.
Combined with the operating income, Trinity posted a net surplus of $736.7 million in its first half compared with a net loss of $176.9 million for the same period a year ago.