Memorial Sloan-Kettering Cancer Center, New York, ended the first nine months of the year with operating income up 22.8% from the same period a year ago, as demand for outpatient care increased, marginally more patients used its Manhattan hospital and insurance paid more for their care.
Memorial Sloan-Kettering reported income from operations of $172 million on revenue of $2.4 billion for the first nine months of the year. That compares with operating income of $140.1 million on revenue of $2.2 million during the same period in 2013.
The cancer center's measure of hospitalizations, patient days, increased by 447 days in the year's first three quarters compared with the first nine months of 2013. That amounts to less than 1% growth but reverses a decline in patient days seen last year. Patient days dropped 3.4% last year from 2012. Revenue per day increased as managed care and other health insurers paid higher rates to the cancer center. Also, use of outpatient care increased by 3.6%, Memorial Sloan-Kettering said in its third-quarter financial filing.
Its outpatient growth came in part from programs created for surgical recovery and patients who need observation. “Inpatient beds are being used temporarily to house these patients who do not require an inpatient stay but are not ready to be discharged,” the system's filing said. More beds will be freed for inpatient care in 2014 and 2015 as Memorial Sloan-Kettering creates new capacity for recovery and observation.
Labor expenses increased as the cancer center added the equivalent of 570 full-time jobs. Compensation and fringe benefits increased 5.3% during the first nine months from the same period a year ago. Overall, expenses increased 7.3% to $2.3 billion for the first nine months this year.
The cancer center has entered into agreements with community hospitals to expand the reach of specialty services. Memorial Sloan-Kettering and Hartford (Conn.) HealthCare announced an alliance last year, which was followed by a similar deal between Hoag Memorial Hospital Presbyterian in Newport Beach, Calif., and Keck Medicine of the University of Southern California.
Follow Melanie Evans on Twitter: @MHmevans
