Catholic Health Partners
, Cincinnati, witnessed what many other systems have seen in 2013—admissions down nearly across the board—but it still reported a higher operating surplus and total revenue.
CHP executives attributed the financial growth to several factors. Even though admissions slipped, patient service revenue increased 2.1% due to higher-acuity cases. The health system also started to realize benefits from a couple of transactions that closed last year.
In July, CHP agreed to a joint venture deal with Summa Health System in Akron, Ohio. Details of the transaction are now publicly available
, showing that CHP acquired a 30% ownership stake in Summa. CHP then invested $250 million into Summa last September, which went toward health IT
and clinical projects. The filing showed the Summa joint venture contributed $8.2 million in CHP’s “other net revenue” last year.
CHP also acquired Kaiser Foundation Plan of Ohio, effective last October. The Kaiser health plan, which became part of CHP's insurance arm, HealthSpan, had revenue of $113 million and 82,000 covered lives in the three months ended Dec. 31. Analysts at Moody's Investors Service questioned the deal because of “Kaiser's historical operating losses and CHP's entry into a new business line and geography,” but still affirmed
the system's A1 rating.
In fiscal 2013, CHP's operating surplus rose 4.4% to $128 million, and revenue increased 5.5% to a shade less than $4 billion. The 3.2% operating margin was down slightly from last year's 3.3%. CHP's total surplus soared 12% to $331.5 million as the system recorded large gains in investments and swap agreements. The organization also ended 2013 with its pension funded at 96%, 225 days cash on hand and a 39.1% debt-to-capitalization ratio.
“The company's performance continues to support the overall mission, strengthens the balance sheet and improves operations, while at the same time building strategic capabilities focused on the delivery of value-based healthcare,” according to the filing. Executives were not available to comment.
CHP's utilization metrics in 2013 fell in several categories, including acute admissions (3.9%), post-acute admissions (1.8%), observation visits (2.7%) and emergency room visits (4.4%).
CHP operates 23 acute-care hospitals, most of which are in Ohio, and is a dominant provider in a majority of its seven primary markets. Follow Bob Herman on Twitter: @MHbherman