Catholic giant Ascension used tough operational discipline and better process standardization to boost its operating margin for the first nine months of its fiscal year.
Ascension, the nation's largest not-for-profit hospital company, saw its operating margin increase to 3.8% of revenue in the nine months ended March 31. The company saw a 2.8% operating margin in the year-earlier period.
The health system has focused on implementing operational and clinical best practices at its nearly 140 hospitals nationally, the company said in its nine-month financial disclosure this month.
As a result of the operating improvements and the addition of Wheaton Franciscan Healthcare–Southeast Wisconsin in March 2016, operating income for the nine months jumped to $642 million on revenue of $17.1 billion compared with operating income of $456 million on revenue of $16.1 billion in the year-earlier period.
The health system also saw net patient revenue increase $990 million, thanks to inpatient and outpatient volumes, according to Nick Ragone, chief marketing and communications officer for the health system. Ragone noted that Ascension's charity care work increased by $74 million as well.
Strong admissions drove much of the improvement for the nine month period.
Across the system they grew to 597,034 in the period from 578,216 the year earlier.
Those admissions generated a 1.5% growth in net patient service revenue per equivalent discharge while Ascension managed the growth in the cost per equivalent discharge to a moderate 0.7%, the company said.