Cleveland Clinic's operating income plummets 71%
Cleveland Clinic saw revenues increase in 2016, but higher labor, supplies and pharmaceutical costs dragged down the 14-hospital system's operating income.
Cleveland Clinic's revenues increased about 12 percent year over year, from $7.2 billion in 2015 to $8 billion last year, according to recently released bondholder documents. However, expenses outpaced the system's revenue gains.
In 2016, Cleveland Clinic's expenses totaled $7.3 billion, up 19 percent from $6.1 billion in the year prior. The increase was largely attributable to growth in pharmaceutical, labor and supplies costs, which climbed 23 percent, 19 percent and 13 percent, respectively, year over year.
Cleveland Clinic ended 2016 with operating income of $139.3 million, down 71 percent from operating income of $480.2 million in 2015. After factoring in nonoperating gains, the system recorded a net income of $513.5 million in 2016, compared to $618.2 million in the year prior.
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