Froedtert Health, a Milwaukee-based system, ended its fiscal 2015 in a better financial position than the previous year as it added patients, improved its payer mix and found ways to deliver care more efficiently.
The three-hospital group reported an operating margin of 7.9% for the year, up from 5% in fiscal 2014.
Admissions increased 5.5% (PDF) and emergency room visits were up 4.9%. Outpatient visits increased 2.8%.
At its two community hospitals, Froedtert has been working to transition some of its outpatient services to physician offices and clinics. That shift was evident in a 9.4% increase in clinic visits even as outpatient volume grew more slowly.
Froedtert also reported that self-pay revenue accounted for 5.8% of the total in fiscal 2015, down from 8% the previous year. Medicaid represented 13.6% of total revenue, up from the prior year's 12%. The share of managed-care revenue remained steady at 39%.
For fiscal 2015, Froedtert saw a $149 million operating surplus on $1.9 billion in operating revenue compared with the prior year's $83.4 million operating surplus on close to $1.7 billion in revenue.
The system also attributed the improved performance to cost-containment efforts and strategic initiatives to deliver more cost-effective care.
Froedtert's capital expenditures in fiscal 2015 included $69.2 million to construct the Center for Advanced Care on the campus of its flagship hospital, Froedtert Memorial Lutheran. The $142 million center is expected to be completed in the fall.
On the mergers and acquisition front, the system acquired a 50% equity stake in Network Health, a local insurance company, last November. It also ended its joint venture with LabCorp of America and assumed full ownership of United/Dynacare Laboratories, a diagnostic services company, in which it previously had a 50% interest. The business now operates under the name Wisconsin Diagnostic Laboratories as a wholly owned but independent subsidiary.
