The migration from inpatient to outpatient care is in full force at Baylor Scott & White Health, and so far, the shift looks good for the not-for-profit health system.
At first, the numbers look gloomy. The Dallas-based system's admissions fell nearly 7% year-over-year in the nine months ended March 31, to about 166,000. Emergency department visits fell 4% in that time, and patient days dropped nearly 6%. That's even as the system upped its licensed beds by almost 2%.
At the same time, outpatient surgeries grew nearly 7% year-over-year to about 159,000. Outpatient revenue as a percent of total patient revenue grew from 61% in the nine months ended March 31, 2018 to more than 63% in the recently ended period.
As that shift is happening, the system's finances remain stable. Baylor Scott & White's operating margin grew to 7.9% in the nine months ended March 31, from 6.9% in the prior-year period. That's well above the 1.7% national median operating margin for U.S. not-for-profit and public hospitals in 2018, according to Moody's Investors Service. Baylor Scott & White's operating income jumped more than 18% year-over-year, to $584 million in the nine months ended March 31.
A Baylor Scott & White spokeswoman did not immediately provide a comment on the system's results.
The health system drew $7.4 billion in operating revenue in the nine months ended March 31, up 4.6% from $7.1 billion in the prior-year period. Expenses grew 3.5% during the same period.
Baylor Scott & White's premium revenue jumped nearly 27% year-over-year to nearly $777 million, which the system said year primarily due to the acquisition of FirstCare Health Plans at the beginning of 2019.
The system's adjusted earnings before interest, taxes, depreciation and amortization grew almost 6% year-over-year to $1 billion in the nine months ended March 31. Cash and investments grew 5% to nearly $6 billion in the nine months ended March 31.
Investment losses at the end of 2018 are still pulling down the system's non-operating returns, resulting in 15% lower net income in the 2019 period: from $728 million in the nine months ended March 31, 2018 to $619 million in the 2019 period.
Baylor Scott & White's capital spending for property and equipment increased 11.6% year-over-year to nearly $414 million in the nine months ended March 31.
Baylor Scott & White and Houston-based Memorial Hermann called off their proposed merger in February, five months after signing a letter of intent.