University Hospitals Health System in Cleveland ended another year of acquisitions with market share gains and a stable operating margin.
The system, which has made five acquisitions in the past two years, ended fiscal 2015 on Dec. 31 with an operating margin of 2.8%, largely in line with the system's 2.9% margin the prior year, financial statements show.
Executives with University Hospitals Health System, which reported an operating gain of $93.6 million on revenue of $3.29 billion last year, have so far maintained operating performance despite deals that have dragged on results, said Moody's Investors Service in a recent ratings report. The system has also made gains in a consolidated market.
“The system has transformed from one that was largely concentrated around the flagship to a diversified regional system with more comprehensive geographic coverage of the boarder northeast Ohio market,” the ratings report said. The system is the market's second-largest player, according to Moody's.
Revenues for the system increased 11.7% for the year and expenses grew marginally faster at 11.8%. Annual expenses totaled $3.19 billion. Labor costs and fast-growing supply expenses contributed to the increased operating budget.
University Hospitals' annual net income declined 17% to $227.3 million from $274.7 million in 2014.