UnityPoint Health is ahead of schedule on a number of initiatives to cut costs and increase revenue, which helped the system improve its financials in the first half of 2015.
The West Des Moines, Iowa-based system has been expanding through acquisitions, which have spurred revenue and volume growth but also put pressure on expenses in recent quarters.
For 2015, UnityPoint is targeting a goal of $53.2 million in cost reductions and revenue opportunities, and realized $25.1 million from its initiatives in the first half of the year.
“The system has already exceeded the annual targets and is working to identify additional opportunities,” UnityPoint said in its earnings report this week.
Its operating margin for the six-month period improved to 2.4%, up from 1.7% in the first half of 2014 and ahead of its budgeted 2%.
Most of the expense growth came from additional patient volume, which was ahead of expectations. Inpatient discharges increased 4.3% in the first half of the year, or 5.1% when adjusted for outpatient activity. Clinic visits were up 4% year over year, but fell short of budget by 1.5%, the system said.
But the additional volume was more positive than negative, and contributed to a 5.9% increase in revenue compared to a 5.2% increase in costs.
In total, UnityPoint reported a $46 million operating surplus on $1.9 billion in revenue in the six-month period, up from a $30.8 million operating surplus on $1.8 billion during the first half of last year.
Medicaid expansion in Iowa and Illinois also affected the system's financials. Self-pay patients accounted for just 2.2% of patient service revenue in the six-month period, down from 3.5% during the first half of 2014.
UnityPoint is continuing to integrate Meriter Health Services into the group after the two providers completed their affiliation in January 2014. Those efforts include reducing Meriter's overhead and allowing the Madison, Wis.-based system to tap into UnityPoint's centralized support services.
The Meriter deal also included an insurance business, Physicians Plus Insurance Corp., which UnityPoint separated from Meriter and now operates as a direct, for-profit subsidiary.
