Investments rescue Inova Health from posting 2016 operating loss
A $265 million investment gain in 2016 offset a tough operating year at five-hospital Inova Health System.
Though revenue jumped 10% last year to $3.3 billion, Falls Church, Va.based Inova’s operating income fell to $130.9 million before special charges compared with $221.4 million in 2015, Inova’s audited year-end financials show.
Income was affected by an increase in staffing, including more physicians.
Not-for-profit Inova also was hit with a $64.5 million charge for terminating its pension plan and another $48.4 million charge to reduce the book value of its InTotal Health Medicaid health plan acquired in December 2012.
InTotal competed for a new Virginia program in 2016 that put the special needs Medicaid population in its own program so as to better manage their care. But the plan wasn’t selected, a loss that “could result in an annual premium reduction of up to $40 million annually” for InTotal Health, according to the financial disclosure.
With the special charges, Inova’s 2016 operating income totaled $18 million compared with $221.4 million in 2015.