Rising expenses led to a 19% drop in the operating surplus of Cedars-Sinai Medical Center in Los Angeles during its recently concluded fiscal 2014, as the center saw more outpatient care amid declining inpatient stays.
Cedars-Sinai realized a $283.7 million operating surplus on nearly $2.93 billion in revenue in the fiscal year ended June 30, compared with an operating surplus of $350.1 million on $2.88 billion in revenue in fiscal 2013. The medical center's operating margin fell to 9.7%, from 12.1%.
Expenses were higher across the board, with total expenses up 4.5% at $2.6 billion, compared with $2.5 billion in the year prior. Interest payments represented the biggest jump, up 31.4% to $44.1 million. Among other costs, expenses from depreciation and amortization rose 14%, professional fees increased by 11%, payroll-related costs were up 3.5% and supplies costs were up 2.9%.
Like many hospitals, care at Cedars-Sinai is shifting toward outpatient visits and outpatient surgical procedures. The center saw outpatient visits climb 5% to 662,055 and outpatient surgeries grow 8% from the prior year to 14,392. Discharges fell 7.5% to 51,419 and patient days decreased 7% to 234,271.
The hospital's total surplus decreased 1.2% to $439.4 million from $444.9 million in the previous year.