(This story has been updated with a correction.)
Norton Healthcare, a five-hospital system based in Louisville, Ky., improved its operating margin in 2014 as it treated more patients, cut its expenses and benefited from Medicaid expansion in the state.
The system reported a surplus of $100.8 million on patient service revenue of $1.8 billion for the year ended Dec. 31, a margin of about 5.6%. The system essentially broke even on patient service in 2013.
Inpatient admissions increased 3% year over year, while outpatient visits grew 8% and physician office visits 11%. In addition to treating more patients, Norton saw a 5% decrease in bad debt as the number of self-pay patients dropped and more patients gained Medicaid coverage.
The system also attributed the revenue growth to hiring additional physicians as well as rate increases on its commercial insurance contracts.
At the same time, Norton gained some breathing room on the expense side of the balance sheet after completing the year-long process to install a new electronic health records system across all of its physician practices, ambulatory care sites and hospitals. In 2014, Norton recorded $17.8 million in expenses related to the EHR system—including staffing, maintenance, repair and other costs—and that was down from $37.6 million the prior year.
(A previous version of this story described the wrong figures as operating revenue and surplus.)
