St. Joseph’s operations slip in first year of affiliation
St. Joseph Health, Orange, Calif., reported it lost more than $16 million from operations in its most recent fiscal year. But its new affiliation with a regional provider wasn’t the cause for the decline.
In March 2013, St. Joseph and Hoag, a two-hospital system based in Newport Beach, Calif., created a new system called Covenant Health Network. Covenant brought in Hoag’s hospitals with St. Joseph’s five in Southern California with the intent of building an integrated delivery system in the region. St. Joseph owns a total of 14 acute-care facilities in California and Texas.
The affiliation significantly helped St. Joseph’s bottom line in 2013, as executives marked it down as a $1.7 billion non-operating gain. But in its fiscal 2014 ended June 30, St. Joseph had to deal with more challenging business issues, namely, lower inpatient volumes, troubles with California’s provider-fee program and rising expenses.
St. Joseph posted an operating loss of about $16.1 million on $5.6 billion in revenue for 2014, versus a $49.7 million operating gain on nearly $5 billion of revenue in the previous year.