RWJBarnabas Health's annual operating income drops 25%

RWJBarnabas Health, an 11-hospital system based in West Orange, N.J., reported a decline in operating income for 2019.

RWJBarnabas Health's operating revenue climbed more than 5 percent year over year to $5.6 billion in 2019, according to unaudited financial documents released Feb. 14. The health system said acute care inpatient and outpatient revenue were up 4 percent and 3 percent, respectively year over year.

Operating expenses were up 6.4 percent year over year in 2019. Expenses increased across all categories.

"The increase in operating expenses was driven by increased salaries and benefits resulting from additional staff, increased physician salaries and fees due to growth in employed physicians as well as the addition of new physician practices, higher drug and implantable utilization and inflationary increases in supplies, higher interest expense due to the private taxable note offering completed in December 2018 as well as the 2019 debt issuance completed in October 2019, and higher depreciation expense associated with several significant projects that became operational in late 2018 and in 2019," the health system said.

RWJBarnabas Health ended 2019 with operating income of $161.5 million, down 25 percent from $215.2 million a year earlier.

After factoring in nonoperating items, including a $449.5 million gain on investments, RWJBarnabas Health's net income climbed to $602.9 million in 2019. In 2018, the health system recorded a $132.6 million loss on investments and net income of $22.3 million.

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