Not-for-profit Orlando (Fla.) Health's operating surplus shot up in the fourth quarter and for its fiscal 2014, thanks to added revenue from a surgical center acquisition.
The health system realized a $41.5 million operating surplus in its fourth quarter on $556 million in revenue, compared with the $2.7 million surplus it recorded during the same quarter ended Sept. 30, 2013. Revenue was up 12% this quarter as a result of the acquisition. That helped bring Orlando Health out of the red for its fiscal year, with a $127.3 million surplus on $2.1 billion of revenue for the fiscal year ended Sept. 30, up significantly from a $9.5 million deficit on $1.9 million in revenue reported in fiscal 2013.
This summer, Orlando Health acquired a 25.6% interest in University Surgical Center, an outpatient surgery facility in Winter Park, Fla., through a partnership with Addison, Texas-based United Surgical Partners International. Together, UPSI and Orlando Health have a majority interest in the surgical center.
Like many hospitals, the system saw an increase in outpatient activity during the fiscal year, up 2.2%, though outpatient surgeries were down slightly.
Orlando Health announced in June that it had decided against merging or affiliating with another system, despite a rough fiscal 2013. System officials had hired consulting firm Kaufman Hall to evaluate eight to 12 organizations, including regional systems and national chains, for possible mergers or affiliations.
The financial results leave Orlando Health with a fourth-quarter operating margin of 7.5%, up significantly from a margin of 0.05% in 2013. The system's fiscal 2014 operating margin is 6%, up significantly from -0.04% the year prior.
Net patient service revenue is up roughly 10% for the quarter and the year, apparently as a result of the surgical center acquisition. Admission numbers have stayed relatively constant, with a 1.8% decrease in total admissions for the fiscal year, offset by a 2.8% increase in newborn and neonatal admissions. Patient days decreased roughly 3% for both the year and the fourth quarter.
Orlando Health's payer mix didn't change a great deal year-to-year, with the exception of a 3.2% increase in managed-care payers for the quarter as compared to the same period the year before. The system set aside 9% less for bad debts in the fourth quarter and 19% less for the year.
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