Partners HealthCare managed to boost its operating margin in the first quarter of 2018 thanks in part to 10% spikes in both provider activity and patient service revenue.
The Boston-based system reported operating income of $115 million and a margin of 3.4% for the quarter that ended Dec. 31, 2017. That's a significant improvement from the same period in 2017, in which Partners recorded a $17 million operating loss and a -0.5% margin.
The system's total operating revenue was up 6% in the quarter, hitting $3.4 billion. That was due to a $256 million increase in provider activity revenue and a $216 million increase in net patient service revenue, including $94 million from the Jan. 1, 2017 acquisition of Wentworth-Douglass Health System in Dover, N.H.
Partners' total operating expenses increased 2% to $3.3 billion in the first quarter of 2018. That was driven partly by an 8% increase in supplies and other expenses and a 5% increase in wages and benefits. The system also felt the effects of rising drug costs and an increase in a state assessment to help fund its Medicaid program.
"We experienced strong first quarter results, driven by volume growth, new efficiencies realized through our Partners 2.0 initiative, and greatly improved performance at Neighborhood Health Plan," Peter Markell, the system's CFO and treasure, said in a statement. "Our challenge through the fiscal year will be to continue executing on our growth and efficiency plans so that we are able to make investments in patient care, research and teaching on behalf of our patients."