Healthcare Business News

Conemaugh patient volume falls short of projections as cost-cutting boosts margins

By Beth Kutscher
Posted: July 24, 2014 - 3:30 pm ET

Conemaugh Health System, a three-hospital group that is being taken over by Duke LifePoint, reported a 1.5% operating margin for fiscal 2014, ahead of expectations, on the strength of its hospital division.

The Johnstown, Pa.-based system booked a net surplus of $28.3 million on $1.2 billion in revenue. Its financial report to bondholders did not include a prior-year comparison. However, last year's report showed a surplus of $33.1 million on $515.7 million in revenue.

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Despite lower patient volume, the hospital division generated a better-than-expected surplus from operations of $26 million for the year. Most of the benefit came from its ability to cut costs, particularly expenses that fluctuate based on volume, such as salaries and supplies, according to the system.

Admissions across its three hospitals declined 5.8%.

The hospital division's performance helped offset a loss from operations of $14.8 million in its physician group, which saw fewer patients in office- and hospital-based settings and performed fewer procedures than budgeted.

Conemaugh in March signed a letter of intent to be acquired by Duke LifePoint Healthcare in a deal that is expected to close in the fall. The joint venture will invest $500 million in Conemaugh over 10 years.

Follow Beth Kutscher on Twitter: @MHbkutscher

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