Lower operating expenses help boost Inova’s surplus
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.