NorthBay margin improves, service line expansion pays off

NorthBay Healthcare system, which operates 157-bed NorthBay Medical Center, reported a higher surplus and operating margin in the first half of 2014 as its daily census improved.

The Fairfield, Calif.-based system, located about halfway between San Francisco and Sacramento in Solano County, had set a goal four years ago to reduce the number of patients leaving the county for care. It decided to concentrate on cardiovascular disease and trauma, a move which appears to be producing positive financial results.

In 2011, NorthBay had a negative operating margin of 2.1%, which improved to 0.2% in 2012 and 6.3% last year.

For the first half of 2014, its operating margin hit 8%. Including non-operating gains, NorthBay reported a total surplus of $21.1 million on $216.5 million in revenue compared with a surplus of $16 million on $185.3 million in revenue during the first half of last year.

Discharges and emergency room visits both increased 5.1% and outpatient surgeries increased 12.9% in the first half of 2014.

Over the past four years, NorthBay has built up cardiovascular surgery capabilities and became certified as a receiving center for heart attack patients and as a chest pain center.

“That's when we began to get additional volume and additional business we didn't have before,” CEO Gary Passama said in a June interview. “That just took off and reduced the out-migration of patients.”

It opened a Level 3 trauma center in 2011, and the program last month was approved for a Level 2 designation.

Passama also sees other areas for growth; the hospital is developing a stroke program and could potentially look at adding acute rehabilitation.

Follow Beth Kutscher on Twitter: @MHbkutscher