Healthcare Business News

Lee Memorial sees higher revenue even as admissions drop

By Beth Kutscher
Posted: April 8, 2014 - 3:45 pm ET

Lee Memorial Health System, Fort Myers, Fla., reported improvements in its operating surplus and revenue despite a drop in admissions during its fiscal 2013, which ended in September.

The three-hospital system realized $63.5 million in operating surplus on nearly $1.3 billion in revenue, according to its financial report. That performance represents a 39.9% improvement compared with the $45.4 million in operating surplus on $1.2 billion in revenue it reported the previous fiscal year.

Its operating margin also improved to 2.8% (PDF) from 1.5% the previous year.

However, the report highlighted a difficult operating environment, where adult admissions declined 2.7%, pediatric admissions, 4.4%, and neonatal cases, 1.8%. Patient days similarly decreased 3.2%.

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But the system saw a boost from outpatient activity, which led to an increase in adjusted admissions of 0.4%, as well as higher net patient revenue per adjusted admission, which increased 3.1% or $41.5 million.

At the same time, it reported that a greater percentage of its patients were on Medicaid, while it saw a decline in the share of commercial patients and, to a lesser extent, Medicare beneficiaries.

The system is tightly managing its expenses to compensate for the shift in payer mix, the report said, but still incurred about $9 million in additional costs related to implementing a new electronic health record system and higher contract payments for hospital-based physician services.

It expects to spend $66.7 million in fiscal 2014 on upgrades to its facilities, information technology and patient equipment. In addition, it is funding a $41.2 million project to build a children's hospital through donations; B. Thomas Golisano, a businessman and philanthropist, contributed $20 million to the project; the facility will be named the Golisano Children's Hospital of Southwest Florida.

Follow Beth Kutscher on Twitter: @MHbkutscher

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