Cadence operating margin thinned ahead of merger
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.