Inova Health's joint-venture health plan with Aetna is exiting the Virginia exchange marketplace in 2018 to stem losses that are dampening an otherwise strong earnings rebound at the system's five hospitals.
As health insurance giant Aetna announced it would leave all Affordable Care Act exchanges in 2018, its joint venture with Inova — Innovation health — is doing the same, according to Inova's chief financial officer Richard Magenheimer.
Magenheimer declined to reveal Innovation Health's losses in the four years it offered insurance on the Virginia exchange. He simply said "it was not a good financial experience.
Innovation Health covers about 200,000 people either with commercial health insurance or as a third-party administrator to self-insured employers.
Despite the exchange losses, Inova had a comeback quarter.
Magenheimer said volumes at its new Women's and Children's Hospital on the main Fairfax, Va., campus helped boost first quarter earnings, as did an increase in fee-for-service patients.
Inova posted operating income in the quarter of $55.5 million on revenue of $866.5 million compared with operating income of $37.7 million on revenue of $787.9 million in the year-earlier period.
The 6.4% operating margin in the quarter was back to pre-2016 levels, Magenheimer said.
The Women's and Children's Hospital opened in early 2016 and was not fully up-to-speed during the first quarter a year ago, he said. The replacement hospital on the Fairfax campus cost about $400 million with a parking garage, he said.
Inova saw a 4% increase in hospital admissions, a 4% increase in emergency admissions, a 5% increase in in-patient surgeries and a 6% gain in outpatient surgeries across its five hospitals in northern Virginia.
Admission growth was strongest at Fairfax, where they increased to 12,404 in the quarter from 11,707 in the year-ago period.
