Aurora Health Care saw its expenses rise during the third quarter as higher patient volumes required more full-time employees.
Salaries and wages increased 3.4% over the prior-year period, which the Milwaukee-based system said was due to the annual salary adjustment of 2.8% that became effective in July. Aurora's full-time staffing grew 5.4% to serve the additional patients.
Adult inpatient days were up to 107,651 from 106,190 during the same quarter the previous year. More patients passed through Aurora's ER, with the system servicing 94,456 patients compared to 92,142 during the same quarter the prior year.
Overall, Aurora saw $94.6 million in operating surplus on $1.2 billion in total revenue for the three months ended Sept. 30, 2015, compared to $149.2 million in operating surplus on $1.2 billion in total revenue during the prior year quarter. The operating margin fell to 7.9% for the quarter, down from 12.6% during the same period last year.
Looking back further, the system saw $337.5 million in operating surplus on $3.6 billion in total revenue for the nine-months ended Sept. 30, compared to $349.6 million in operating surplus on $3.4 billion in total revenue during the same period last year.
More was spent on supplies. That expense increased 15.7% in the third quarter, compared to the same period in the prior year. The uptick came from an increased use of more costly specialty pharmacy drugs, as well as an increase in the cost of generic drugs. Aurora reported that more cardiac, orthopedic and spinal procedures also increased implant costs.
Investment losses grew too, with the system losing $16.4 million during the third quarter, compared with a $4.8 million loss during the prior -year quarter.
The system was active in mergers and acquisitions activity. In August 2014, Aurora acquired a 49% minority interest in Bay Area Medical Center, located in Marinette, Wisc. In August 2015, Aurora and Bay Area combined their medical group practices in Marinette to form Aurora Bay Area Medical Group.
Aurora invested in digital health, too, acquiring in June 2015 a 6.3% interest in StartUp Health Holdings for $5 million. StartUp Health is a global health innovation company with over 100 digital health portfolio companies.
