The University of Kansas Hospital saw a large increase in patient volume in the first quarter of fiscal 2016, but the additional costs of treating more patients overshadowed the increase in revenue.
The 696-bed Kansas City hospital reported a 12.1% increase in discharges in the quarter ended Sept. 30. Outpatient visits also were up 7%. Combined inpatient and outpatient emergency room visits, however, decreased 4.6%.
The increase in volume contributed to a 10.3% increase in net patient revenue. But the hospital's expenses also jumped year over year, increasing 12.2%. The higher patient load put upward pressure on salary and benefit costs, contract labor and supply expenses, the hospital said in an earnings report.
As a result, the hospital's operating margin in the quarter declined to 8.8% from 9.8%.
The two-hospital campus has been in building mode, breaking ground this year on a new patient tower known as Cambridge North. The $280 million expansion will be funded with bonds, donations and cash on its balance sheet.
In total, the University of Kansas Hospital reported a first-quarter operating surplus of $34.7 million on $392.6 million in revenue compared with an operating surplus of $34.6 million on $353.5 million in revenue in the prior-year period.
While many hospitals are seeing decreases in uncompensated care, that wasn't the case in Kansas City. At the University of Kansas Hospital, bad debt and charity care edged up to represent 4.2% of revenue, an increase from 4.1% in the prior year.
The hospital this month co-sponsored a forum with four state legislators to push for Medicaid expansion in the state. The event, which brought together more than 200 stakeholders, came as 17 Kansas hospitals are facing closure.
