The rising number of insured has allowed not-for-profit systems to enjoy more financial stability. Aurora Health Care saw its operating income soar in 2014, according to its (latest) annual financial statement filed Wednesday.
The Milwaukee-based not-for-profit system's operating surplus surged 220.8% in 2014 over 2013 and was up 264.5% over 2012. Aurora saw its total revenue rise to $4.7 billion in 2014, a 10.8% increase from the previous year.
Aurora saw more insured patients courtesy of the Affordable Care Act, said CFO Gail Hanson. Aurora also benefited from previously uninsured patients attaining coverage through the state's partial Medicaid expansion.
Aurora's strong year was also buoyed by a decrease in depreciation and amortization, Hanson said. Depreciation dropped to $205.8 million, down from $229.6 million in 2013. Hanson said the lower depreciation was due to the system completing the write-off of its old electronic health records systems in 2013. Aurora adopted an Epic EHR in 2014.
Productivity of Aurora physicians also played a role, Hanson said. The system employs a little over 1,500 physicians, and 75% of Aurora's revenue comes from its physicians, she said. Adult inpatient days increased 2.3% while ER visits saw a 33.9% uptick.
Other not-for-profit systems around the country are seeing better financial results, according to a report issued Tuesday by Moody's Investors Service. Not-for-profit hospital operating margins and operating cash flow margins stabilized as the revenue growth rate edged ahead of expense growth rate for the first time since FY 2011 medians.
The report said revenue growth of 4.7% in 2014 is still lower than historical averages, but ahead of the all-time low of 3.9% in 203.