St. Paul, Minn.-based HealthEast Care System reported a larger-than-expected increase in its operating surplus in the second quarter, thanks to rising inpatient revenue.
The four-hospital system reported an operating surplus of $6.2 million on $249.5 million in revenue for the three months ended Feb. 28, compared with a $5.2 million surplus on $231.5 million during the same period last year. The operating surplus was up 18.2% from the year prior, and revenue was up 7.8%, mostly thanks to a slight increase in inpatient revenue.
HealthEast had previously budgeted for a $3.8 million operating surplus on $240.4 million in revenue. Inpatient revenue was about 12% higher than expected, as admissions were up 4.5% and patient days were up 1.1%.
The system's average daily census was up 22% and emergency-room visits were up 6%, according to utilization statistics.
Revenue did not increase proportionately to volumes because of an “unfavorable” shift toward government payers, officials said in a financial filing. Medicaid accounted for 15.3% of gross revenue for the system, up from 12.9% the year before.
HealthEast reported a total surplus of $6.2 million, up 39% from $4.5 million during the same period the year prior. Its operating margin was 2.5%, compared with 2.3% the year before.
HealthEast has recorded a $7 million operating surplus on $484.5 million in revenue so far this fiscal year. The surplus is nearly half what was reported the year before because of one-time expenses from the implementation of a new Epic Systems electronic health record in the HealthEast hospitals and physicians' offices.
