UMass Memorial Health Care improved its operating performance in fiscal 2014 but finished the year with a lower net surplus.
The five-hospital system based in Worcester, Mass., reported a 7.9% increase in revenue (PDF) to finish the year ended Sept. 30 with an operating surplus of $53.8 million on $2.3 billion in revenue. That compares with an operating loss of $57.3 million on $2.1 billion in revenue for fiscal 2013.
The revenue increase came despite a 4.5% decrease in discharges, a 2.7% decrease in visits to its health center and a 2.1% decrease in emergency-room visits.
The growth came from rate increases from payers, a $51.7 million decrease in the amount of free care it provided and a $52.4 million increase in Medicaid supplemental payments.
Its expenses increased only 1.3%, primarily because of rising supply costs. UMass reduced the size of its workforce to cut $800,000 from its salary, benefit and contracted labor costs. However, it incurred $14.8 million in costs associated with paying severance benefits and unemployment costs.
Even as it brought its operating performance back into the black, UMass faced a tough comparison year.
The system in 2013 reported a $107.5 million gain from selling its clinical research and anatomic pathology outreach laboratory businesses to Quest Diagnostics.
That gain, plus higher nonoperating income, led UMass to report a net surplus of $72.9 million for fiscal 2013. In fiscal 2014, its net surplus declined to $60.8 million.
UMass in June reduced its ownership stake in Fairlawn Rehabilitation Hospital to 20% from 50%, selling the share to its joint venture partner, HealthSouth Corp. The system recorded a $16.5 million gain from the sale in its fiscal 2014 results.
Follow Beth Kutscher on Twitter: @MHbkutscher
