St. Louis-based SSM Health's operating income continued its descent in 2017, a few months after the news that it had sealed the acquisition of two health systems in Wisconsin.
The Catholic-sponsored health system's operating income dropped to $5.7 million in 2017 on about $6.5 billion in revenue, compared with $10 million on $6.1 billion in revenue in 2016.
SSM's operating income would have increased to nearly $15 million last year if not for about $9.3 million in "nonrecurring items," which the report explained were revenues and expenses related to a one-time reduction in force, presumably layoffs, in 2017 and a fee related to the early termination of contracted services.
SSM spokesman Brian Westrich said he could not comment on the reduction in force because the health system is in a quiet period as it prepares for a bond offering. SSM cut about 1% of its workforce in November, or about 350 employees, according to the St. Louis Post-Dispatch.
Both revenue and expenses increased by roughly 6.3% in 2017 from 2016, with both categories rounding out 2017 at just under $6.5 billion. On the expense side, interest shouldered the highest spike at 19% between 2016 and 2017. Supplies was the second highest at nearly 16% during that time. Meanwhile, salaries and benefits, far and away the biggest expense category, increased by 5% during that time. Medical claims costs also increased slightly.
On the revenue side, net patient services revenues increased by 3.3% year over year to about $4.4 billion in 2017. Investment income increased 104% to $74.7 million in 2017.
Despite the drop in operating income, SSM rounded out 2017 with a profit of nearly $243 million, up from $99.4 million in 2016.
SSM in early January completed its acquisition of Fond du Lac, Wis.-based Agnesian HealthCare and Monroe, Wis.-based Monroe Clinic, adding four hospitals, eight post-acute facilities and dozens of outpatient sites to its ranks.
SSM now owns 23 acute care hospitals, one children's hospital, 10 post-acute care facilities, a health maintenance organization, a national pharmacy benefit management company and a network of physician practice operations.
SSM acquired St. Louis University Hospital from Tenet Healthcare Corp. in 2015.
