Lower op­er­at­ing ex­penses help boost Inova’s sur­plus

Modern Healthcare - - REGIONAL NEWS - —Bob Her­man

Not-for-profit Inova Health Sys­tem, Falls Church, Va., recorded lofty gains in its op­er­at­ing and to­tal sur­plus in the first half of fis­cal 2014 as its ex­pen­di­tures dropped year-over-year, the sys­tem re­ported.

Op­er­at­ing ex­penses at the five-hos­pi­tal sys­tem de­creased 0.1% in the six months ended June 30, a rare oc­cur­rence in the sec­tor. Many not-for-prof­its have re­ported sta­ble over­all fi­nances re­cently, but most have faced ris­ing op­er­at­ing costs.

Inova said it saved money by out­sourc­ing its di­etary ser­vices and re­duc­ing the num­ber of staff work­ing on its Epic Sys­tems Corp. elec­tronic health-record sys­tem. Inova com­pleted its Epic EHR and rev­enue-cy­cle im­ple­men­ta­tion last year.

The sys­tem also recorded higher out­pa­tient sur­gi­cal vol­umes, which helped boost net pa­tient-ser­vice rev­enue. Out­pa­tient surg­eries rose 13.3%, to­tal­ing al­most 23,000 in the first six months of the year.

Over­all, Inova’s op­er­at­ing in­come climbed 75% to $111.2 mil­lion. To­tal rev­enue in­creased 3.7% to $1.31 bil­lion. Inova’s op­er­at­ing mar­gin in the first half of fis­cal 2014 sat at 8.5%, a sharp im­prove­ment from the 5% mark in last year’s com­pa­ra­ble pe­riod. To­tal sur­plus, which in­cludes gains from in­vest­ments, al­most dou­bled in the first six months of the fis­cal year to $245 mil­lion.

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