The threat of losing its ability to treat Medicare patients wasn't a drag on the Vanderbilt University Medical Center's finances in the latter half of 2018.
The Nashville not-for-profit academic medical center generated $74 million in operating income on nearly $2.2 billion in revenue in the six months ended Dec. 31, 2018, up from $30.6 million in operating income on $2 billion in revenue in the prior-year period. Expenses were up 6% in that time to $2.1 billion.
The 8% year-over-year revenue spike is primarily due to increased patient service revenue, but increases in academic and research revenue also played a role, among other factors, Vanderbilt wrote in a narrative section of its financial results. Salaries, wages and benefits, drug costs and medical supplies were the primary drivers behind the higher expenses.
"Our YTD FY19 operating results reflect our focus on increases net patient service revenue while continuing to tightly manage our variable and fixed costs, which is evidenced by the fact that expenses grew at a rate of 6% while revenue and net patient revenue grew at 8%," Vanderbilt wrote.
Vanderbilt, which did not immediately respond to a request for comment, appears to also be recovering from its costly 2017 installation of Epic's electronic health record platform, a $214 million project that weighed on its operating income.
The CMS in November threatened to strip Vanderbilt of its Medicare funding after finding it failed to properly report an accidental patient death and implement measures to prevent future incidents. The agency ultimately changed course after receiving Vanderbilt's revised plan of correction.
Vanderbilt's chief financial officer Cecelia Moore said in a statement that the organization continues to see strong demand for its services and has worked through any remaining access issues after the implementation of its new EHR.
"The Medicare revocation issues, which have been resolved, did not impact our volume during the last six months," she said.
The medical center generated $62.6 million in excess revenue over expenses in the latter half of 2018, up from $54 million in the prior-year period. Vanderbilt attributed the increase to improved operating income, which was partially offset by a $13.5 million investment loss and other non-operating items.
Vanderbilt's hospital inpatient days increased 5% in the six months ended Dec. 31, 2018 year-over-year to 175,749. Discharges rose 3.4% in that time to 32,215, while ambulatory visits jumped 6.2% to 1.2 million.
Vanderbilt's operating earnings before interest, depreciation and amortization of $156 million in the latter six months of 2018 was up $46 million from the prior-year period. Vanderbilt said the increase was driven by its $161 million increase in operating revenue and offset by a $114 million increase in expenses.