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87 CFO / FINANCE Mercy Health Operating Surplus Plummets 76% After Sale of Insurance Unit By Ayla Ellison C incinnati-based Mercy Health's second quarter results were rocky. e nonprofit system ended the second quarter with operating income of $10.3 million — a 76.3 percent drop from an operating surplus of $43.4 million in the second quarter of last year. Mercy reported operating revenues of $1.14 billion in the second quarter of 2016, up 5.9 percent from $1.07 billion in the same period of 2015. Mercy said the financial boost was attributable to year-over- year increases in acute care volumes. However, the system saw operating expenses rise 9 percent in the sec- ond quarter of 2016, outpacing the growth in revenue. e increase in expenses was primarily attributable to growth in labor and supplies costs, according to Mercy. In the first half of 2016, the system's revenue increased to $2.23 bil- lion, up from $2.04 billion in the same period of the year prior. Al- though Mercy reported a gain from the sale of HealthSpan Partners, a health insurance company and physician group, the system's oper- ating income fell 67.4 percent year over year to $20.38 million in the first half of this year. e system's finances were also impacted by revenue cycle challenges due to "system conversions and implementations," according to Mer- cy. e system said management is making a number of changes to improve revenue cycle performance, including using resources to ac- quire Huntersville, N.C.-based Ensemble Health Partners, a revenue cycle firm, during the second quarter. Mercy ended the first half of 2016 with an operating margin of 0.9 percent. n CHS Ups Divestitures, Will Sell More Than 12 Hospitals By Brooke Murphy F ranklin, Tenn.-based Community Health Systems will divest more hospitals than anticipated as it contin- ues to develop its downsizing plans, reports WFMJ. In August, CHS said it planned to sell 12 hospitals, up from the 10 hospitals it anticipated in May. Now the health sys- tem expects to sell more than 12 hospitals to trim its debt. CHS ended the second quarter of 2016 with a $1.4 billion loss, compared with a profit of $117 million in the same period of the year prior. It has not disclosed which hospitals or the exact number of hospitals it is negotiating to sell. n Orlando Hospitals Won't Bill Victims of Pulse Nightclub Shooting By Mackenzie Bean O rlando Health and Florida Hospital vowed to not bill survivors of the Pulse nightclub shooting for out-of-pocket medical costs, writing off a com- bined $5.5 million, reported Orlando Sentinel. On June 12, a gunman entered the Orlando, Fla.-based LGBT nightclub and started shooting, killing 49 and leav- ing 53 injured. As the only Level I trauma center in central Florida, Orlando Health's Orlando Regional Medical Cen- ter treated 44 of the victims. While bills will be sent to health insurers for patients with coverage, Orlando Health will absorb any additional costs not covered by the survivors' policies, said spokes- woman Kena Lewis. In addition, the system will not charge the families of nine victims who died shortly after arriving at ORMC. Orlando Health expects to write off a minimum of $5 million in unreimbursed care. Florida Hospital treated 12 patients after the shooting. Of- ficials said they won't even bill the victims' insurance for treatment, or for any additional follow-up surgeries that may be needed. The health system will absorb more than $525,000 in costs. "The pulse shooting was a horrendous tragedy for the vic- tims, their families and our entire community," said David Strong, president and CEO of Orlando Health, according to the report. "During this very trying time, many organizations, individuals and charities have reached out to Orlando Health to show their support. This is simply our way of paying that kindness forward." n Becker's Hospital Review 8th Annual Meeting april 17-20, 2017 hyatt regency, chicago Call 1.800.417.2035 or email registration@ beckershealthcare.com or visit beckershospitalreview.com/ conference/ 233 Great Hospital and Health System Leaders speaking; Over 300 speakers