Mercy Health's surplus falls in aftermath of insurance exit

The operating margin at Mercy Health, the largest health system in Ohio, fell to a slim 0.9% in the first half of this year. Higher labor expenses and the residual effects from a divested insurer hurt the not-for-profit system.

However, Mercy hopes to turn around its financial situation partly through a newly acquired revenue-cycle company, which will help Mercy and other hospital systems collect patient bills and refine chargemasters.

In May, Mercy bought Ensemble Health Partners, a revenue-cycle firm based in Huntersville, N.C., for $60 million. The deal could be worth an additional $50 million if “certain metrics are achieved,” the system said in its financial report.

Other health systems, including Dignity Health and Ascension Health, have acquired revenue-cycle companies to help more with bill collections and explaining what patients owe. More people with job-based health insurance and individual coverage have high-deductible policies, which puts more pressure to collect money on hospitals and doctors.

Accidental drug overdoses killed 3,050 people in Ohio last year, an average of eight per day, as deaths blamed on the powerful painkiller fentanyl again rose sharply and pushed the total overdose fatalities to a record high, the state reported last week.

More than one-third of those deaths—1,155—were fentanyl-related, which more than doubled from the previous year and increased from just 75 in 2012.

Authorities who had been targeting prescription painkiller abuse say the problem has changed quickly in recent years as users turned to heroin, fentanyl and even stronger drugs.

Republican Gov. John Kasich said stepped-up prescription monitoring and new guidance for prescribers helped sharply reduce opioid doses dispensed in the state, and said Ohio has other action in the works to curb prescription drug misuse.

He also wants more discussion about the dangers of drugs reaching children throughout their school years. The previous generation grew up accustomed to relatively easy access to prescription painkillers, which has fueled the epidemic, Kasich said.

—Associated Press