Temple University Health System is seeing returns from a comprehensive turnaround plan designed to focus on higher acuity services while becoming less dependent on filling beds through the emergency department.
The Philadelphia-based academic medical center this year posted its first operating surplus (PDF) since at least fiscal 2011, and also bested its own expectations for the year.
Under its new strategy, Temple made significant investments in its surgical and transplant service lines and nearly doubled the number of transplants it performed just three years earlier.
Its average patient acuity increased in fiscal 2015, which ended June 30, from what it experienced in fiscal 2012.
The system's Fox Chase Cancer Center also reversed an operating loss (PDF) as it saw higher outpatient volume, redesigned its revenue-cycle processes and improved its managed-care contracts. An increase in chemotherapy infusions, radiation therapy and diagnostic imaging procedures similarly contributed to higher outpatient revenue.
The system also highlighted in an investor presentation that it was able to save $19 million in professional liability costs by focusing on patient safety, quality and risk-management initiatives.
In addition, Temple received $9.7 million in unexpected reimbursement (PDF) from the state through Pennsylvania's Access to Care Grant funding.
Despite the positive trends, Temple grappled with lower inpatient volume at its three hospitals. Total discharges declined 2% while emergency department visits were flat. There also was a 4% decline in the number of inpatient admissions through the ED.
The system's physician group similarly experienced a drop in office visits.
Temple's operating expenses also increased as the higher patient acuity drove up supply and drug costs as well as labor costs.
Nevertheless, the net effect was a $9.3 million operating surplus on $1.5 billion in revenue, an improvement from the prior fiscal year's nearly $10 million operating loss on $1.4 billion in revenue.