Allina Health's bottom line takes $104.8M hit from nurse strikes
Minneapolis-based Allina Health saw revenues increase in the third quarter of 2016, but the 13-hospital system's operating income fell in the three months that ended Sept. 30.
Allina revenues increased 4.62 percent year over year to $962.61 million in the third quarter, according to recently released bondholder documents. The financial boost was attributable, in part, to increased patient volume. Although inpatient admissions remained almost flat year over year, Allina said outpatient admissions and total surgeries were up in the third quarter of 2016 compared to the same period the year prior.
The system recorded an operating loss of $67.74 million in the third quarter of this year. That's a significant change from the operating gain of $12.19 million Allina recorded in the same period of 2015.
Looking at the first nine months of this year, Allina posted an operating loss of $13.66 million on revenue of $2.91 billion. In the first nine months of 2015, the system recorded an operating gain of $102.22 million on revenue of $2.79 billion.
Allina's operating losses in the third quarter and in the first nine months of this year were primarily attributable to expenses related to two strikes called by the Minnesota Nurses Association. Allina said it incurred $84.68 million of strike expenses in the three months that ended Sept. 30. For the first nine months of 2016, the price tag for the strikes reached $104.88 million.
The nurses association authorized a strike in June after Allina nurses overwhelmingly rejected an offer by the health system that would have eliminated union-backed health insurance and moved the workers to its corporate plans. During the seven-day strike, Allina brought in 1,400 replacement nurses.
Health benefits were again the sticking point when Allina nurses went back on strike September. The six-week strike ran from Sept. 5 to Oct. 16.
Allina recorded net income of $26.62 million in the first three quarters of this year, compared to net income of $73.12 million in the same period of 2015.
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