Cone Health is seeing the benefit of its acquisition of Alamance Regional Medical Center after an integration period that raised expenses.
The Greensboro, N.C.-based system finished its fiscal 2014, ended Sept. 30, with a 2.3% operating margin (PDF) after booking an operating loss in the prior fiscal year.
Cone closed its acquisition of 218-bed Alamance on May 1, 2013. The alliance added patient volume but also costs associated with the integration.
Yet the system’s latest earnings report for fiscal 2014 shows that, even on a pro forma basis, its revenue is rising, more outpatient services are being delivered and its operating surplus is back in the black.
In total, Cone Health reported an operating surplus of $33.4 million for fiscal 2014 on revenue of $1.4 billion. If Alamance had been part of the system for its entire fiscal 2013, it would have had a $20.3 million loss that year on nearly $1.3 billion in revenue.
Its actual fiscal 2013 results showed a $49.5 million loss on $1.1 billion in revenue.
Cone’s pro forma operating results also showed that inpatient volume declined 6.7% (PDF) year over year, though outpatient visits were up 8.3%.
Compensation and supply costs continued to increase across the five-campus system. Its unadjusted expenses were 15.2% higher year over year, including a 10% increase in salaries and benefits and an 18.4% increase in supply costs.
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