Norton Healthcare and UnityPoint Health last year saw strong investment gains, an area that has helped other health systems score earnings wins for the year.
Norton, a five-hospital, not-for-profit system, had the strongest earnings in 2016 among the four main competitors in Louisville, including the University of Louisville Hospital, Baptist Health and KentuckyOne.
Operating income slipped slightly for the year, according to the system's financial disclosures. Norton posted operating income of $125.3 million on revenue of $2.1 billion compared with operating income of $130.2 million in 2015 on revenue of $2 billion.
Investment income, however, increased to $23.3 million in 2016 compared to an investment loss of $36 million in 2015. Taken together with other non-operating income, Norton posted a higher net surplus in 2016.
Adam Kempf, Norton senior vice president of finance, said financial markets generally were a little stronger in 2016 giving rise to better investment income for the system.
Norton also has been ratcheting down on costs in anticipation of flattening volumes from exchange and Medicaid enrollees, Kempf said.
System clinicians and staff have made inroads on productivity and the reduction of contract labor to try to keep costs in check, he said.
"We're making sure we're operating as efficiently as possible," Kempf said.
UnityPoint, which operates 19 hospitals across Iowa, Illinois and Wisconsin, posted an investment gain of $168.8 million in 2016 compared with $726,000 in 2015, according to its financial disclosures.
That gain and other non-operating income more than offset a big decline in operating income for the year, down to $6.6 million compared with $67.5 million in 2015. Des Moines, Iowa-based UnityPoint ended the year with net income of $144.7 million on revenue of $4.1 billion compared with net income of $58.3 million on revenue of $3.9 billion in 2015.
The health system, which includes a large physician practice and health plan, received approval from the Federal Trade Commission this month to proceed with University of Wisconsin Health to run UnityPoint's Meriter hospital in Madison under a joint operting agreement.
The deal will give UnityPoint—Meriter patients better access to the university's specialized care, while Meriter hospital will help the university's 505-bed main hospital with capacity constraints.
Not-for-profit hospital systems generally posted higher year-over-year investment gains in 2016 as financial markets rose and the hospitals booked their gains.