Essentia Health, a not-for-profit system based in Duluth, Minn., said its operations and financial investments in 2014 outperformed the system's 2013 performance—a feat replicated by few other health systems at the moment.
Recent quarterly-earnings releases from not-for-profit health systems have generally shown improvements in operations, like Texas Health Resources
in Arlington, or in investment returns, like Cleveland Clinic Health System
—but rarely in both areas. For some, like Phoenix-based Banner Health
, margins have decreased in each.
Essentia said its operating margin in fiscal 2014, ended June 30, stood at 2.6%, according to unaudited financial documents (PDF)
. That was up from 2013, when Essentia's operating margin totaled 1.8%. Similarly, large gains on the investment side resulted in a 7% total margin for Essentia, compared with 5.4% in 2013.
Overall, Essentia's total revenue rose 6.4% in the fiscal year to $1.75 billion. That revenue growth rate outpaced Essentia's 5.6% expense growth rate. Salaries, supplies, utilities and professional fees all increased year over year. Essentia's operating surplus was $46.2 million, while the total surplus reached $128.7 million.
Like other systems, Essentia dealt with lower inpatient volumes. Discharges fell 4.2%, while inpatient surgeries decreased 4.9%. However, higher-acuity inpatient cases, outpatient visits and emergency room visits offset those downward trends.
Essentia operates 17 hospitals throughout Idaho, Minnesota, North Dakota and Wisconsin. In June, the system said CEO Dr. Peter Person
will retire in 2015.Follow Bob Herman on Twitter: @MHbherman