Sharp HealthCare released its 2018 financial report Monday as it gears up to welcome a new CEO later in the week.
The San Diego, Calif.-based not-for-profit health system drew $3.8 billion in revenue in its fiscal 2018, which ended Sept. 30, up 9.4% from fiscal 2017, when it was $3.5 billion. Expenses rose at a slightly slower clip: 8.4% to $3.6 billion in the recently ended fiscal year.
On Thursday, longtime SSM Health executive Christopher Howard will take over as Sharp's new CEO, replacing Michael Murphy, who held the role for the past 22 years. Murphy will stick around until March 1 to ease the transition. A Sharp spokesman declined to comment on the financial results, citing the system's preparation for its incoming CEO.
Sharp's excess of revenue over expenses fell 1.8% to $331 million in fiscal 2018. Like many health systems, Sharp's profit suffered partly due to lower investment income, which fell 33% year-over-year to $127 million in fiscal 2018.
Sharp's admissions rose nearly 3% year-over-year to about 82,000 in fiscal 2018, and its occupancy jumped from 71.5% in fiscal 2017 to 74% in fiscal 2018. Its outpatient visits declined 3.6% year-over-year, however, and total births declined 6.5% in that time.
Sharp's collective bargaining agreement with the Sharp Professional Nurses Network, an affiliate of the United Nurses Associations of California/Union of Health Care Professionals, ends this year. Before the existing contract was approved in December 2016, the union's nurses voted in November 2016 to hold a 10-day strike to protest what they described as unfair labor practices. The union later called off the strike after Sharp's management offered to negotiate further.
Negotiations on the new contract are still a few months out, which is the typical timeline, said union spokeswoman Anjetta Thackeray. The current contract, which covers about 5,000 Sharp nurses, ends in September, she said. In 2016, Thackeray said the big sticking points were around retention and recruitment of nurses.
"There were some real issues with keeping nurses at Sharp," she said. "One thing you want to do is make sure that you have nurses that are well-trained and are supported in their workplaces."
Sharp had a short-lived stint in the CMS' Next Generation ACO program beginning in 2017, but the health system stopped participating in February 2018 after lending its ACO $5.2 million to fund the required guarantee against potential shared losses under the program, according to Sharp's financial report.