University of Pennsylvania Health System, Philadelphia, one of the largest academic medical centers in the country, recorded massive gains in its revenue and surpluses last year, while keeping expenses in check.
In fiscal 2013, ended June 30, the health system's operating margin hit 5.3%. But in fiscal 2014, the operating margin jumped to 7.4%, according to audited financial statements.
The jump was largely attributable to a lower growth rate in expenses. UPHS said revenue increased 12.5% to $3.9 billion in 2014, while expenses rose at a lower 10% rate. Its malpractice insurance costs actually decreased year-over-year, a trend seen nationwide as more providers consolidate. That led to a $291.4 million operating surplus in 2014, a 57% jump from the $185.1 million operating surplus in 2013.