Community Health Network, Indianapolis, reported Tuesday that its operating margin for the three quarters ended Sept. 30 had soared to 9.3% from 1.6% in the same period the prior year.
The eight-hospital system recorded an operating surplus of $132.8 million on $1.4 billion in revenue for the nine-month period. That figure was up significantly from the $20.7 million operating surplus reported on $1.3 billion in revenue during the year-ago period.
That's because even though expenses were up across the board, revenue climbed 10.8% during the three quarters.
Management pointed to changes in inpatient and outpatient utilization as driving the increase in Community Health Network's operating margin. Inpatient surgeries rose 1% as inpatient admissions overall declined 1.9%. But at one of the network's Indianapolis hospitals, inpatient admissions actually increased 2.6%. Meanwhile, emergency room visits were up 4.5% across the system.
The network also benefitted from an improvement in uncompensated care. Charity care and bad debts as a percentage of total patient revenue fell to 4.5% for the nine months ended Sept. 30, 2014. For the same time period a year ago, that percentage stood at 5.8%. A favorable shift in payer mix also helped the system's bottom line, as the percentage of self-pay patients dropped and commercially insured patients rose.
And while investment income didn't rise from the $39.9 million reported in the year-ago period, Community Health Network still managed to realize $22.4 million in investment gains for the nine-month period recently ended. That, coupled with the improved operating performance, resulted in a total surplus of $132.9 million, compared with $40.7 million a year ago.
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