Children’s Community Health Plan growth boosts Children’s Hospital’s operating income

Health system posts 53 percent increase in first half of 2018

Children's Hospital of Wisconsin

Children’s Hospital and Health System, Inc. reported a 53 percent increase in operating income the first half of 2018, driven largely by enrollment growth in its Children’s Community Health Plan.

Children’s Hospital of Wisconsin

The health system’s operating income grew from $21.5 million in the first half 2017 to $33 million this year, according to its recent financial filings.

The system has seen significant growth in its Children’s Community Health Plan, as the health system has added plans on the Affordable Care Act exchange in the last year, according to a Children’s Hospital spokesman.

Operating revenue from the Children’s Community Health Plan grew in the first half of 2018 to $233.8 million, compared to $136.5 million a year earlier. It represented about 37 percent of the system’s total operating revenue in the first half of the year.

Children’s Hospital launched Children’s Community Health Plan in 2005 as an HMO for patients who qualify for BadgerCare Plus, the state’s Medicaid program for low-income residents. In 2017, the hospital began offering its plan on the Affordable Care Act exchange in Wisconsin.

Other drivers of growth in the first half of 2018 were higher neonatal intensive care unit and outpatient volumes, and a lower government payer mix compared to the same time in 2017. Net patient service revenue increased $22.6 million in the first half of 2018 to $359.6 million.

Medicaid, which pays the health system at about 80 percent of cost, made up 50.2 percent of the system’s payer mix in the first half of the year, compared to 52.2 percent a year earlier.

Total operating revenue increased 24 percent in the first half of the year compared to last year, from $518.6 million to $642 million. Operating expenses also grew 23 percent, from $497 million to $609 million in the first half of 2018.

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