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March 09, 2015 01:00 AM

Advocate Health Care improves operating margin; merger looms

Beth Kutscher
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    Advocate Health Care improved its operating margin in 2014 as the 12-hospital system prepares to close its merger with NorthShore University HealthSystem.

    However, volatility in the financial markets ultimately weakened the Downers Grove, Ill.-based system's overall financial picture and excess of revenue over expenses was cut in half compared to the previous year.

    For the year ended Dec. 31, Advocate reported an operating surplus of $330.6 million on $5.2 billion in revenue, with an operating margin of 6.3%. In 2013, its operating surplus was $300.2 million on revenue of $4.9 billion, for an operating margin of 6%.

    Yet when investment income was factored in, the system reported $369.6 million excess of revenue over expenses, compared with the prior year's $765.3 million.

    The system did not break out its patient volume statistics, but did note that it experienced a transition from self-pay patients to Medicaid during 2014. The amount of charity care it provided dropped to $272.3 million for the year compared with $467.9 million in 2013.

    Advocate and NorthShore disclosed their merger last September and hope to complete the affiliation this year, pending regulatory approval. The 16-hospital group will be known as Advocate NorthShore Health Partners.

    In a January investor presentation, Advocate detailed that it will expand its 17.8% market share with NorthShore's 4.9% share of the Chicago-area market.

    NorthShore, based in Evanston, Ill., also reported a higher operating surplus in the quarter ended Dec. 31, the first quarter of its fiscal year. Inpatient admissions declined nearly 10% but outpatient visits were up more than 14%.

    Follow Beth Kutscher on Twitter: @MHbkutscher

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          • - Luminaries
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        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
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      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
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