St. Francis Health System, while remaining extremely healthy financially, reported a small dip in its surplus and operating margin in the past year due in part to a sharp increase in administrative costs.
Tulsa-based St. Francis Health System, which operates six facilities across Oklahoma, posted a $118 million operating surplus on $1.16 billion in revenue in fiscal 2015, which ended June 30. That's down 1.7% from the $131 million surplus on $1.11 billion in revenue reported last year. Its operating margin decreased from 11.84% in 2014 to 10.14% in 2015.
While revenue rose just 4.5% from 2014 to 2015, administrative expenses soared 13%, from $103 million in fiscal 2014 to $117 million in 2015. Drugs and patient-care supplies rose by 5.5% from $202 million in 2014 to $213 million in 2015. And employee compensation costs rose by 4.7% compared to last year, from $544 million in 2014 to $570 million in 2015.
Its payer mix is also shifting. Medicare's share rose from 24% of all revenue in 2014 to 26% in 2015. Revenue from Medicaid rose by only 1 percentage point, from 13% to 14%. Oklahoma is among the states that did not expand Medicaid. Commercial insurance and managed-care payments remained steady at 44%.
In fiscal 2015, St. Francis completed the remaining $32.8 million investment in its new trauma emergency department, which opened in September 2014. It also posted a remaining balance of $54.1 million for its implementation of Verona, Wis.-based Epic Systems electronic health-record system.
