Sentara's first half benefits from transactions, more heart surgeries

Sentara Healthcare, Norfolk, Va., reported a higher operating surplus and total revenue in the six months ended June 30 as the system started to reap rewards from two recent transactions and higher volumes in two service lines.

Last July, Sentara completed its merger with Halifax Regional Health System. The South Boston, Va.-based organization includes 438 beds across its hospital and long-term care facilities. The transaction was valued at $155 million, with $115 million of that total set aside for capital investments over the next decade.

Sentara also finalized a long-term lease to operate Albemarle Health in Elizabeth City, N.C., which includes an 89-bed community hospital. Vidant Health in Greenville, S.C., previously operated Albemarle.

Sentara's total revenue in the first half of fiscal 2014 rose by almost 8%, or $166.7 million, to $2.29 billion. The Halifax and Albemarle deals accounted for almost 60% of that increase. However, like its year-end results for 2013, the expansion added expenses to the balance sheet.

The system also said cardiac surgeries and outpatient imaging volumes increased 7.1% and 6.1%, respectively, in the past six months, which helped boost net patient service revenue.

Sentara's operating surplus inched ahead 1.7% to $141.6 million, giving the system an operating margin of 6.2% in the first half of 2014 compared with last year's 6.6% figure. The total surplus fell 3% to $236.4 million, as Sentara's investment gains were lower year over year.

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