Inova's operating income plunges 92% as investment gains boost bottom line

Inova Health's operating income plummeted in 2016 due to special charges, but the Falls Church, Va.-based system ended the year with higher net income than in 2015 after factoring in investment gains.

Inova said revenue increased about 9.5 percent year over year to $3.3 billion in 2016, according to recently released bondholder documents. The revenue growth was attributable to higher patient volume. Inova said acute admissions, observation cases, deliveries and emergency admissions increased year over year.

The system said expenses were up 13.6 percent, climbing to $3.1 billion in 2016. Inova's expenses related to salaries and benefits totaled $189.3 million last year, up about 14.2 percent from the year prior. The growth was primarily attributable to increased staffing to handle higher patient volume and a substantial increase in the number of employed physicians.

Inova incurred several one-time charges in 2016, including a $64.5 million charge for terminating its pension plan, which was fully liquidated in December. The system was also hit with a $48.4 million charge related to the reduction in value of its Medicaid health plan.

Inova ended 2016 with operating income of $18 million, down 92 percent from $221.4 million in the year prior.

After factoring in a $265 million nonoperating gain, Inova reported net income of $283 million, up from $197.2 million in 2015.

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