Health First sees operating income plunge 89% in FY 2016

Health First saw revenue rise in fiscal year 2016, but the Rockledge, Fla.-based system's expenses outpaced revenue growth.

Health First, which includes four hospitals and various commercial and Medicare health plans, saw revenue rise 13.3 percent to $1.42 billion in FY 2016, according to recently released bondholder documents. The system saw year-over-year growth in net patient service revenue and premium revenue, which increased 9.8 percent and 21.1 percent, respectively. 

The system recorded expenses of $1.41 billion in FY 2016, up 18.3 percent from $1.2 billion in FY 2015. Health First's supplies costs jumped 30.4 percent year over year to $520.88 million in the most recent fiscal year.

Health First ended FY 2016 with operating income of $6.14 million, down 89.5 percent from $58.64 million in FY 2015. "Our operating income was impacted due to growth and acquisitions in our physicians group, reinvesting more than $70 million to improve our facilities and technology, and other accounting activities that occurred during FY 2016," Matthew Gerrell, vice president of marketing and communications at Health First, said in an emailed statement. "These expenses, while necessary in our mission to improve the health and well-being of our community, provide only a partial view of Health First's financial status and the positive impact on those we serve. Health First's fiscal year 2017 forecast is more aligned with fiscal year 2015's performance, and we fully expect to achieve our goals." 

After factoring in nonoperating gains, Health First recorded a net surplus of $18.66 million in FY 2016, compared to a net surplus of $37.59 million the year prior.

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