An Estimated $600 Million Net Income with Expected Provider Fee Due
System Continues Transformation and Improvement Efforts to Confront Challenges of Industry Environment
SAN FRANCISCO – September 27, 2017 – Dignity Health, one of the nation's largest health care systems, today announced the results of its 2017 fiscal year, posting net income of $384 million for the year ended June 30th. Results were released following a standard audit of Dignity Health’s financial statements by its public accounting firm.
The organization recorded an operating loss of $67 million on $12.9 billion in revenue. However, had a full twelve months of the California Provider Fee funds been approved and recorded, an estimated additional $216 million in income would have resulted in a positive operating margin of $149 million and $600 million in net income. Investments gained $556 million due primarily to strong performance overall across equity markets.
“I am incredibly proud of our 63,000 caregivers and staff. Our quality is better, our patients are safer, and the experience we are delivering for our patients and our employees is improving, despite an uncertain industry environment.” said Lloyd H. Dean, Dignity Health’s president/chief executive officer. “We remain focused on our core mission of providing affordable, quality care to all with special attention to the poor and underserved, while continuing our initiatives to transform and enhance our delivery of care through innovation and partnerships.”
The national health care system also invested $2.6 billion in charity care, community health programs, and other community support programs including subsidizing the unreimbursed costs of government programs, up from $2.2 billion in FY 2016. All net income is reinvested in the organization including, in 2017, $633 million in capital projects to cover costs which include the continued implementation of electronic health records, information technology, patient-focused medical equipment, seismic upgrades, new patient tower projects, and office building purchases.
Operational Improvements Continue
Dignity Health completed its first year of a multi-year operational improvement plan with the objective to adjust the revenue and cost structure of Dignity Health to meet the changing demands and reimbursement trends in the health care marketplace. The plan involves initiatives that include improving overall quality and patient experience as well as being an industry leader in adopting more efficient ways of delivering patient care.
“While we continue to face headwinds, we are proud of the improvement in our operations, financial performance and, most importantly, patient experience across the Dignity Health system,” said Daniel Morissette, Dignity Health’s senior executive vice president/chief financial officer, “We are enthused by the significant improvements in quality and the patient experience by leveraging partnerships and technology.”
Organizational Key Initiatives
Dignity Health as part of its operational improvements continues to explore partnerships that improve the delivery of care for our patients:
On October 24, 2016, Dignity Health and Catholic Health Initiatives signed a non-binding letter of intent to explore aligning the two organizations and expanding their mission of service in communities across the nation and are in the final stages of the due diligence process to assess the potential alignment.
In August 2017, Dignity Health and UCSF Health announced an agreement that will bring UCSF’s academic medical center expertise to three Dignity Health hospitals: Sequoia Hospital in Redwood City, and Saint Francis Memorial Hospital and St. Mary’s Medical Center, both in San Francisco. Those hospitals will also become members of the Canopy Health accountable care network. Dignity Health-affiliated physicians will collaborate with UCSF clinical faculty and share best practices and improve access, quality, efficiency and coordination of care for shared patients.
In March 2017, Dignity Health announced a joint venture to construct and operate a 60-bed acute inpatient rehabilitation hospital in the greater Las Vegas, Nevada, metro area, expected to open in 2019. The agreement also includes joint operation of 12 outpatient rehabilitation clinics in the Las Vegas market.
Innovative Approaches to Care
Dignity Health teamed up with strategic partners on initiatives to improve health outcomes, including:
Dignity Health published online information about its successful Human Trafficking Response (HTR) Program, including internal victim response procedures to encourage other health systems and hospitals to implement similar programs to protect and support trafficked persons identified in the health care setting.
In October, Dignity Health was awarded a contract as one of 16 national, regional, or state hospital associations, Quality Improvement Organizations, and health system organizations by The Hospital Improvement Innovation Network. This is a collective momentum of the Hospital Engagement Networks and Quality Improvement Organizations to reduce patient harm and readmissions, and transform health care systems to work better for the American people and for the Medicare program.
Also in August, Dignity Health was named as one of the 2017 Best Places to Work in IT by Computerworld. As one of the top 100 organizations nationally, Dignity Health provides a challenging environment to its IT staff while providing great benefits and compensation.
About Dignity Health
Dignity Health, one of the nation’s largest health care systems, is a 22-state network of more than 9,000 physicians, 63,000 employees, and 400 care centers, including hospitals, urgent and occupational care, imaging and surgery centers, home health, and primary care clinics. Headquartered in San Francisco, Dignity Health is dedicated to providing compassionate, high-quality, and affordable patient-centered care with special attention to the poor and underserved. In FY17, Dignity Health provided $2.6 billion in charitable care and community services. For more information, please visit our website at www.dignityhealth.org. You can also follow us on Twitter and Facebook.