WakeMed sees turnaround in third quarter financials but inpatient volume lags

WakeMed Health & Hospitals improved its operating performance in its fiscal third quarter as its operating surplus improved to $1.5 million after an operating loss of $15.1 million in the third quarter of 2013. The gain came despite treating fewer inpatients as it tightly managed expenses.

The three-hospital system based in Raleigh, N.C., reported a surplus of $24.9 million on $776.1 million in revenue for the quarter ended June 30. That compares to a $1.3 million deficiency in revenue over expenses in the prior-year period, when revenue was $765.8 million.

Discharges across the system fell nearly 3% while the number of surgical procedures declined nearly 4%. However, its emergency departments remained busy, with a 5% increase in visits.

WakeMed has been under new leadership since May, when Donald Gintzig was named CEO after serving on an interim basis since last October.

The system’s previous CEO, Bill Atkinson, stepped down last September, two months after the system entered into a deferred prosecution agreement to resolve criminal charges that it had overbilled Medicare for cardiovascular care.

The fallout from the investigation had depressed cardiovascular volumes, but patients began to return for cardiac care this year. In the fiscal third quarter, cardiovascular procedures were up 2.3%.

A June report from Fitch Ratings affirmed the system’s credit rating at AA- but revised its outlook to negative after WakeMed posted a negative 1.9% operating margin in the first half of its fiscal year.

However, the agency acknowledged the leadership change as well as large investments WakeMed is making in electronic health records, an accountable care organization and a new hospital.

Follow Beth Kutscher on Twitter: @MHbkutscher