Outpatient volume fuels Hawaii Pacific Health's FY14 gains

Hawaii Pacific Health, a four-hospital system headquartered in Honolulu, reported significant growth in its bottom line in its most recent fiscal year despite inpatient admissions falling.

Hospitalizations have been on the decline nationwide as healthcare reform and economic pressures have pushed more people away from the four walls of the hospital to less costly outpatient settings. More robust outpatient volumes have helped many hospitals and health systems weather the storm.

Outpatient visits for Hawaii Pacific Health rose more than 3.8% in its fiscal 2014, which ended June 30, according to the not-for-profit system's audited financials (PDF). Emergency-room visits, urgent-care visits and outpatient surgeries all rose year over year as well.

Hawaii Pacific Health's admissions conversely dropped 2.5% compared with fiscal 2013. However, the loss of inpatient visits was offset by higher-acuity cases, or patients who needed more intensive, higher-reimbursed care. Patient days reflected that, climbing 0.7% last year.

Overall, Hawaii Pacific Health's operating margin in fiscal 2014 totaled 9.3% on $1.17 billion of revenue (PDF), a sizable swing from its 6.3% operating margin on $1.07 billion of revenue in 2013. The system's operating surplus increased more than 67% to $108.6 million, as executives also were able to keep expenses in check. The rising stock market also helped the organization record a $135.3 million total surplus.

Hawaii Pacific Health is the state's largest private healthcare organization. Its present finances differ sharply from those of competitor Hawaii Health Systems Corp.

Hawaii Health Systems Corp., a publicly funded system, operates 12 hospitals, including many in remote parts of the Hawaiian Islands. The system has not yet reported results for 2014, but in the past two years has shown red ink. In 2013 and 2012, Hawaii Health Systems Corp. cumulatively lost more than $307 million from operations (PDF), which prompted many layoffs at facilities statewide.

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