Geisinger Health System is benefiting from acquisitions and a focus on high-acuity service lines, but the group still saw its expenses outpace revenue in its fiscal first quarter.
The Danville, Pa.-based system, which operates six acute-care hospitals, a multispecialty physician group and a health plan business, reported growth in both patient volume and health plan membership in the period ended Sept. 30. That growth, as well as its strategic focus on higher-acuity services, contributed to an 11.9% increase in revenue in the quarter.
Geisinger's admissions increased 17.2% year over year, but most of that growth came from its acquisitions of Lewistown (Pa.) Hospital and Holy Spirit Hospital in Camp Hill, Pa. Admissions grew at a more modest 0.8% at hospitals that it has owned for at least two years.
Membership in Geisinger's health plans also increased 7.4% year over year. As of Sept. 30, the system had 514,000 health plan members, with 38,000 contracted through the federal health insurance exchange.
Yet Geisinger's expenses also increased across the board, including for salaries and benefits, contracted services and supplies. Those costs grew faster than revenue and reduced its operating surplus for the quarter.
In total, Geisinger reported a first-quarter operating surplus of $32 million on $1.2 billion in revenue compared with an operating surplus of $46.6 million on $1 billion in revenue in the prior-year period.
Like most of its peers, the volatile financial markets also took a toll on its bottom line. Geisinger reported net investment losses of $159.9 million in the quarter.
Still, Geisinger is continuing its growth strategy. In October, it closed on its deal for AtlantiCare Health System in Atlantic City, N.J. AtlantiCare had an operating surplus of $36.1 million on $621.1 million in revenue in the nine-month period ended Sept. 30.
Geisinger's Holy Spirit EMS also merged with Danville Ambulance Service, adding 25 emergency medical technicians and 16 paramedics who provide services in two counties.
