Tight expense management helps boost surplus at Sutter
Sutter Health, a 24-hospital system based in Sacramento, Calif., has continued to improve its operating performance through the first nine months of the year, cutting expenses to overcome flat revenue growth.
Admissions continued to decline, decreasing 4.2% in the third quarter. However, the drop was offset by a 2.3% increase in outpatient revenue.
Located in a state that expanded Medicaid eligibility to adults up to 138% of the federal poverty level, Sutter reported that its provision for doubtful accounts fell 50% in the first nine months compared with the year-ago period. Bad debt and charity-care write-offs also decreased by an undisclosed amount. The system cut costs for purchased services and other expenses, while salary and benefits rose a modest 3%.
Sutter booked an operating surplus of $224 million on $7.2 billion in revenue during the first nine months of the year, compared with an operating loss of $18 million also on $7.2 billion in revenue during the prior-year period.