An increase in patient volume at Ochsner Health System in New Orleans contributed to a higher operating margin in the first half of 2015 and the system is moving forward with new expansion projects.
Ochsner, which continues to form alliances with other hospitals, saw an increase in referrals from affiliated providers throughout the region. In addition, a milder winter meant it didn't have to contend with the harsh weather that kept patients at home the previous year.
The system reported an operating surplus of $42.8 million on $1.3 billion in revenue for the six-month period ended June 30 compared with an operating surplus of $8.1 million on $1.1 billion in revenue during the prior-year period.
Its operating margin increased to 3.4% from 0.7% in the first half of fiscal 2014.
Ochsner blamed the massive January 2014 ice storm that hit much of the Southeast for dragging down its operating performance in the first half of last year.
By comparison, the first six months of 2015 saw patient discharges increase 8.3%, while inpatient surgeries were up 11.1% and outpatient surgeries climbed 6%. Emergency room visits increased 12.4% and outpatient visits grew 18.1%.
But Ochsner also saw a 50% year over year increase in patient transfers, which the system attributed to more referrals from affiliated facilities.
Ochsner in September added two more hospitals to its network. It entered into an agreement to provide management services to St. Charles Parish Hospital, a public safety net facility in Luling, La., as well as a joint operating agreement with St. Tammany Parish Hospital to coordinate care for patients in western St. Tammany Parish.
The system also said its efforts to improve the collection process at the time of service led to a decrease in bad debt. Bad debt and charity care accounted for 7% of net patient service revenue in the six-month period compared with 8.7% during the same period last year.
In addition to its operating performance, Ochsner also improved its cash position with last month's $252.8 million taxable bond issuance. The bonds will fund a number of capital improvement projects, including plans to expand its flagship hospital, Gayle and Tom Benson Cancer Center and an outpatient clinic in Covington, La.