Intermountain Health logs $549M net income in Q1 2023

Intermountain Health logs $549M net income in Q1 2023 unknown Intermountain Health logs $549M net income in Q1 2023FierceHealthcare

Intermountain Health pulled in $104 million in net operating income (2.6% operating margin) and a $549 million excess of revenues over expenses during the first quarter of 2023, according to recent financial statements from the Rocky Mountain nonprofit.

The 33-hospital system reported a 41.3% year-over-year increase in revenues to nearly $4 billion for the three months ended March 31, though much of the increase can be attributed to last April’s merger with the eight-hospital SCL Health.

Similarly, the system saw a 43.9% year-over-year rise in its operating expenses to $3.7 billion with employee compensation and benefits alone jumping by 51.9%.

Compared to the prior year’s opening quarter (and after interest, depreciation and amortization), Intermountain’s net operating income fell by $26 million.

However, $481 million from investment income during the quarter went a long way to boost its net income to $549 million, particularly compared to the prior year’s $428 million investment loss and resulting $298 million net deficit of revenues over expenses.

Volume numbers accompanying the financials outline an uptick in demand similar to those reported by other systems during the first quarter. When comparing year-over-year data on a pro forma basis that includes pre-merger Intermountain and SCL, inpatient admissions rose 4.3%, adjusted admissions rose 8.2%, emergency room visits rose 3.8% and outpatient visits rose a staggering 30.4% (including joint venture activity).

The system also increased its workforce by 2,570 full-time equivalents compared to legacy head counts, which, alongside industrywide wage increases and economywide inflation, contributed to higher employee compensation and benefits spending at the system.

Intermountain recently closed its year of merger-fueled growth with $121 million in net operating income and a $3.1 billion excess in revenues, though that bottom line was bolstered by almost $4.1 billion in affiliation contributions from the SCL deal. Without those funds on the books, Intermountain’s $1.6 billion in investment losses would have landed the system squarely in the red.

Pitting Intermountain’s latest numbers against those of its large nonprofit peers place the system’s operating performance above Kaiser Permanente’s 0.3% operating margin and Sutter Health’s 2.3% operating margin but still somewhat below Mayo Clinic’s rock-solid 3.5% operating margin. Each of the organizations were well ahead of Catholic giant CommonSpirit Health, which posted a blistering -8% operating margin for the most recent quarter.