Six months after its merger with Cadence Health, Chicago-based Northwestern Memorial HealthCare is reporting improved second-quarter operating earnings, though its total surplus declined.
Northwestern reported an operating surplus increased 15% to $95.7 million in the three months ended Feb. 28 compared with pro forma combined Northwestern and Cadence results for the same period a year earlier. Revenue climbed 6.5% to $983 million.
The pro forma fiscal 2014 results provided in the report are calculated as if the Cadence merger and an additional office building acquisition had occurred a year earlier.
Compared with those combined fiscal 2014 numbers, Northwestern's total surplus for the quarter was down almost 24% to $152.7 million. The combined organization's quarterly operating margin was 9.7%, compared with 9% the year before.
The Cadence deal, completed in August 2014, created a health system with four hospitals and nearly $3 billion in annual revenue.
The organization began operations as a combined entity at the beginning of Northwestern's 2015 fiscal year.
In the first six months of operations as a merged system, Northwestern reported a $162 million operating surplus on $1.9 billion in revenue, an 8.5% margin. The margin was roughly the same on the pro forma numbers reported for the same six-month period a year earlier.
The addition of Cadence's Central DuPage in Winfield, Ill., and Delnor Community Hospital in Geneva, Ill., added roughly 500 beds to the system, yielding most of a 52.3% increase in admissions.