Cleveland Clinic's operating income dips 24% in Q1

Cleveland Clinic's revenue increased in the first quarter of 2019, but the system's operating income declined year over year, according to unaudited financial documents released May 30.

Cleveland Clinic's revenues climbed to $2.5 billion in the first quarter of this year, up 18.8 percent from $2.1 billion in the same period of 2018. The boost was largely attributable to higher net patient service revenue, which increased 19.5 percent year over year.

Increases in operating expenses outpaced Cleveland Clinic's revenue growth. The system's expenses were up 20 percent year over year in the first quarter of 2019. Expenses grew across all categories, including supplies, administrative services, and salaries, benefits and wages, according to financial documents.

Cleveland Clinic ended the first quarter of 2019 with operating income of $36.2 million, down 24 percent from $47.6 million in the first quarter of last year.

During the first quarter of this year, Cleveland Clinic's nonoperating gains totaled $883.2 million. That's compared to the first quarter of 2018, when the system reported nonoperating gains of $58.9 million. The increase was attributable to higher investment returns and membership substitution contributions from Stuart, Fla.-based Martin Health System and Indian River Medical Center in Vero Beach, Fla. The two organizations joined the Cleveland Clinic health system Jan. 1.

After factoring in nonoperating gains, Cleveland Clinic ended the first quarter of 2019 with net income of $919.4 million, up from $106.5 million in the same period a year earlier.

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