Ca­dence op­er­at­ing mar­gin thinned ahead of merger

Modern Healthcare - - REGIONAL NEWS - —Bob Her­man

The op­er­at­ing mar­gin at Ca­dence Health, Win­field, Ill., nar­rowed slightly in its fis­cal 2014, ended June 30, but the two-hos­pi­tal sys­tem, now part of North­west­ern Memo­rial Health Care, still tal­lied healthy met­rics over­all.

Ca­dence and Chicago-based North­west­ern com­pleted their merger and be­gan op­er­at­ing as a new sys­tem Sept. 1.

In fis­cal 2014, Ca­dence’s op­er­at­ing mar­gin fell to 9.6%, com­pared with 11% in fis­cal 2013. Like other health sys­tems na­tion­wide, Ca­dence strug­gled to keep ex­penses in check. La­bor costs, ben­e­fits, sup­plies and other ex­pen­di­tures cu­mu­la­tively rose more than 15% year over year, while rev­enue grew 13.5% to $1.28 bil­lion.

Ca­dence’s to­tal sur­plus in­creased 44% to $211.3 mil­lion, good for a 16.5% mar­gin, as the sys­tem recorded siz­able in­vest­ment re­turns.

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