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44 FINANCE Intermountain's Bad Debt Jumps 41% in 2015 By Ayla Ellison S alt Lake City-based Intermountain Healthcare saw its operating mar- gin fall year over year, as bad debt and expenses increased. e 22-hospital network reported an operat- ing margin of 3.8 percent in 2015, down from a 5.5 percent margin a year earlier. Like many other insurers, Intermountain's insurance arm, SelectHealth, incurred losses last year related to the risk corridor program under the Affordable Care Act. e risk corridor program is designed to tem- porarily level the financial playing field for payers by limiting both unexpectedly high gains and losses associated with participating in a new insurance market. Insurers that saw greater profits paid into a pool to compen- sate insurers with higher losses. e three- year program, which runs through 2016, fell short by more than $2.5 billion in its first year because so many insurers experienced losses in the individual market. Intermountain said it has incurred losses of $392.5 million tied to the risk corridor pro- gram for 2014 and 2015. As of Dec. 31, Inter- mountain had only collected $11.9 million in risk corridor payments. "Management intends to aggressively pursue all available means to collect any risk corridor receivables that it believes are fully valid under existing law," said Intermountain officials. Intermountain saw revenue rise to nearly $6.1 billion in 2015, up 9.6 percent from 2014. Al- though the system benefitted from growth in patient service revenue and revenues attribut- able to SelectHealth last year, it was challenged by an increase in bad debt. Intermountain said bad debt increased 41 percent year over year to $215.3 million in 2015. e health system's revenue gains were par- tially offset by an 11.4 percent year-over-year increase in expenses. Intermountain recorded $5.5 billion in expenses in 2015. e system ended 2015 with net income of $279.1 million, down 35.2 percent from the year prior. n $186M Operating Loss Leaves Presence Trimming Jobs By Brooke Murphy C hicago-based Presence Health will layoff 250 employees during the next three months and leave another 450 jobs unfilled this year. The 11-hospital system announced the job reduction plan days after reporting a $186 million operating loss in 2015. In 2014, Presence reported a $12.7 million operating loss on $2.58 billion in revenue. Overall revenue fell 2 percent in 2015, to $2.52 billion. In addition to layoffs, the health system plans to leave vacant 450 jobs that are expected to become available this year through attrition. The total reduction of 700 positions will save Presence an estimated $50 million by the end of 2016. Presence CEO Michael Englehart, who joined the system last October, has attributed almost half of the system's fi- nancial losses to an inadequate collections system, which forced the hospital to write off some bills for being to old to collect on. Sandra Bruce, former president and CEO of Chicago-based Presence Health, said $186 million in reported losses were "primarily due to a combination of necessary accounting corrections and discretionary management decisions." She said Illinois budget difficulties in 2015 hurt Presence Health disproportionately since the system serves a high percentage of Medicaid patients, and escalating malprac- tice settlements in Illinois because of the lack of tort reform were also to blame. n Trinity Health Records $27.1M Operating Loss: 4 Things to Know By Ayla Ellison L ivonia, Mich.-based Trinity Health recorded an oper- ating loss for the final six months of 2015, caused in part by recent acquisitions. Here are four things to know about Trinity's most-recent financials. 1. Trinity recorded a $27.1 million operating loss for the six-month period that ended Dec. 31, down from a $228 million operating gain in the same period a year earlier, according to The Post-Standard. 2. The decline in operating income was partially attrib- utable to rising labor costs, as the system added new employees with its acquisition of St. Joseph's Hospital Health Center in Syracuse, N.Y., and St. Francis Care in Hartford, Conn. 3. Trinity posted operating expenses of $7.9 billion in the final six months of last year, an increase of $1.1 billion from the same period a year earlier. About half of the increase in operating expenses was attributable to the system's acquisition of St. Joseph's and St. Francis Care, according to the report. 4. Trinity reported revenue of $7.9 billion for the final six months of last year, an increase of 12.3 percent from the same period a year earlier. n