Beaumont Health's net income up, operating income dips in 2017: 4 things to know

Southfield, Mich.-based Beaumont Health saw net income increase 12.2 percent in fiscal year 2017 compared to fiscal year 2016, while operating income dipped during the same period year over year.

Here are four things to know about the nonprofit health system's fiscal year ended Dec. 31, 2017, according to recent financial documents.

1. Beaumont Health reported operating income after other items of $195.56 million in 2016, compared to $151.87 million in 2017. Beaumont Health CFO John Kerndl attributed the decrease to a planned market adjustment for employees in 2017 that increased salary costs. He also pointed to an annuitization of a pension, which drove a noncash expense of $25 million in 2017.

2. Beaumont Health posted revenues of $4.44 billion in the year ended Dec. 31, 2017, up from $4.37 billion in the previous year. Mr. Kerndl said there were several contributors to the increase, including a material rise in acuity in a number of the system's hospitals; new revenue cycle initiatives aimed at denial management and underpayments; and favorable payer relationships, including a 2017 payer settlement that drove a year-over-year rise in net revenue.

3. The nonprofit health system saw expenses climb to $4.26 billion in 2017, up from $4.17 billion during 2016. Beaumont saw salary, wages and benefits expenses climb 5.8 percent during that period.

4. After including nonoperating gains, Beaumont Health ended 2017 with net income of $321.58 million, up from net income of $286.70 million recorded in 2016. Mr. Kerndl said strong investment income in 2017 exceeded Beaumont's previous fiscal year by $88 million.

Editor's note: This articles headline has been edited.

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