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Kaleida Health improves margin by cutting costs


By Bob Herman
Posted: August 30, 2014 - 12:01 am ET
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Kaleida Health kept expenses in check in the first half of 2014, giving the Buffalo, N.Y.-based system higher-than-expected surpluses.

Last year, Kaleida, which includes three acute-care hospitals, struggled to control expenditures, specifically labor costs and supplies, which resulted in a $15.3 million loss from operations. The trend was seen across the industry, as many not-for-profits tallied lower operating margins.

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So far in 2014, Kaleida's expenses declined 1.6%, most notably in employee salaries and supplies. Operating revenue, meanwhile, grew 0.7% to $637.9 million in the six-month period that ended June 30. That resulted in an operating surplus of $5.9 million—more than double what Kaleida executives budgeted for the first half of 2014 and a vast improvement from the $8.7 million operating loss in the same six-month period last year.

Including investment gains, Kaleida's surplus in the first half totaled $19.9 million compared with a $5.5 million net loss in the first six months of 2013.

Follow Bob Herman on Twitter: @MHbherman


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