Texas Health Resources continued to demonstrate that it has fully recovered from last year's brush with the Ebola virus, which had only a fleeting impact on its financial performance.
The Fort Worth-based system reported a higher operating margin in the first quarter of this year as it saw more patients at its hospitals. It also focused on managing costs. Salaries rose at Texas Health, but it was able to limit supply cost increases and cut other expenses.
The system's operating margin increased to 4.5% for the quarter, compared with 3.6% in the prior-year period.
Moody's Investors Service earlier this year upgraded Texas Health's credit rating to "stable" after revising it to “developing” in the aftermath of the Ebola crisis. The system's Texas Health Presbyterian Hospital Dallas last October was the first U.S. hospital to diagnose an Ebola patient, who later died. The hospital came under fire for initially failing to recognize the virus and because two of its nurses also contracted the disease.
Texas Health Presbyterian suffered a short-term hit to its patient volume and revenue, but both had recovered by year-end.
Across Texas Health's 24 hospitals, patient volume, as measured by discharges, increased 3% in the first quarter of 2015. Outpatient visits were flat, and emergency department volume declined 3%. The system attributed that drop to competition from urgent care and freestanding EDs across the Dallas region.
Outpatient care represented 40.7% of revenue, down from 41.2% in the prior-year period.
Texas Health also changed its charity care policy Jan. 1 (PDF), and will no longer pursue payment on patient accounts that fall under its presumptive charity care guidelines. That change decreased its provision for bad debt, which fell to $54.6 million for the quarter, down from $81.6 million during the same period last year.
The system, which is not located in a Medicaid expansion state, also saw its uninsured rate fall to 8% of patient revenue, down from 9% as of Dec. 31, 2013.
In total, Texas Health reported a $43.9 million operating surplus on $978.4 million in revenue for the quarter, compared with a $34.4 million operating surplus on $942 million in revenue in the prior-year period.