Sutter Health, Sacramento, Calif., reported a 64% jump in net income for 2003, thanks to increased patient volumes and continued belt-tightening. Net income for the not-for-profit chain of 26 hospitals reached $465 million in 2003, up from $284 million in 2002. Excluding investment income, earnings from operations climbed 47% to $389 million from $265 million the previous year, representing a 7% margin. Total revenue grew 16% to $5.7 billion. Sutter has faced criticism for allegedly charging rates up to 80% higher than other California hospitals, and the California Public Employees' Retirement System has proposed legislation that would allow payers to scrutinize hospitals' proprietary financial information. Sutter is spending $5.7 billion over 10 years to upgrade or replace facilities and $1.2 billion for new information technology to comply with Leapfrog Group standards. It spent $109 million on charity care in 2003, up from $87 million in 2002. "We continue to believe that a 5% operating margin is the minimum level necessary to adequately fund our commitments," said Van Johnson, Sutter's chief executive officer. -- by Laura B. Benko
Sutter has big gains in both net, operating profit
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