Becker's Hospital Review

56 CFO / FINANCE Google's sister-company Verily to tackle health insurance By Julie Spitzer V erily, the life sciences unit owned by Google's parent company Alpha- bet, has been in talks with insurers about jointly bidding for contracts in which it would take on risk for hundreds of thousands of patients, according to CNBC. is sector, commonly referred to as popu- lation health or care management, is hard to break into. For one, it's crowded. And, Veri- ly would also have to put forth a convincing proposal to payers describing how it would drive their costs down. Technology companies are increasingly at- tracted to taking on risk, since it primarily in- volves organizing health data without devel- oping an insurance company. One possibility, according to CNBC, could involve Verily an- alyzing health data to determine which pa- tients would benefit most from certain types of care, like home monitoring or prescription adherence. is gig makes up about $20 bil- lion to $25 billion in annual spending with a potential of up to $1 trillion as more insurers move to these kind of risk-based agreements, Ari Gottlieb, a director at PwC, told CNBC. Verily has some healthcare-related partner- ships with 3M, Sanofi and Dexcom, but now, it's looking to hire people with a health in- surance and services background. It's already tapped a couple experts, but it is still looking to fill posts like a "physician lead" with ex- perience managing "risk for patient popula- tions," and a "managed care analytics lead" to "manage risk for patient populations," ac- cording to CNBC. Moreover, Verily has access to a plethora of data. rough its Project Baseline clinical re- search study, the Alphabet-spinout has been collecting a huge amount of patient health information. Another Alphabet company, Sidewalk Labs, and its startup, Cityblock, are looking to revolutionize healthcare for low-income communities. Tackling healthcare spending, especially risk- based agreements, won't be easy, but Verily may be well poised for success. n Norton Healthcare's net income climbs 40% in FY 2017: 4 things to know By Morgan Haefner L ouisville, Ky.-based Norton Healthcare saw operating and net income grow in the fiscal year ended Dec. 31, 2017, compared to the previous year. Here are four things to know about the nonprofit health system's financials, ac- cording to unaudited bondholder documents. 1. Norton Healthcare reported revenues of $2.2 billion in 2017, up 5 percent from $2.1 billion in 2016. The health system largely attributed the growth to an increase in patient service revenue and joint venture income. 2. At the same time, Norton Healthcare saw expenses grow 6 percent to $2 billion, compared to $1.9 billion in 2016. Salary and wage expenses grew 5 percent year over year for the health system, which was a major component of the uptick in expenses. 3. Greater total direct expense growth than total revenue growth resulted in a decline in EBITDA, from $219.5 million in 2016 to $205.9 million in 2017. 4. However, Norton Healthcare saw operating income increase 16 percent to $151.9 million, compared to $130.9 million in 2016, due to improved invest- ment results. After including nonoperating gains, Norton Healthcare ended 2017 with $200.1 million in net income, 40.2 percent higher than $142.7 million reported in 2016. n Christus Health sees operating income soar 120%: 4 things to know By Kelly Gooch I rving, Texas-based Christus Health saw its operating income jump to $101.9 million in the first half of fiscal year 2018, up from $46.4 million reported in the same period a year prior. Here are four things to know about the health system's results for the six months ended Dec. 31, 2017, according to recent financial documents. 1. The system posted revenues of $2.7 billion in the first half of 2018, compared to $2.3 billion reported in the same period for fiscal year 2017. 2. This growth is largely attributable to net patient service revenue, which climbed 15 percent year over year. Premium revenue also increased to $140.1 million in the six months ended Dec. 31, 2017, up from $96.1 million reported for the first half of 2017. 3. As revenues grew, Christus Health saw expenses rise from $2.3 billion in the first half of 2017 to $2.6 billion for the same period in 2018. 4. The system ended the first half of 2018 with $138 million in net income, up 26 percent from $109.7 million recorded for the first six months of 2017. n

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