Mercy Health’s surplus wanes in aftermath of insurance exit

The operating margin at Mercy Health, the largest health system in Ohio, fell to a slim 0.9% in the first half of this year. Higher labor expenses and the residual effects from a divested insurer hurt the not-for-profit system.

However, Mercy hopes to turn around its financial situation partly through a newly acquired revenuecycle company, which will help Mercy and other hospital systems collect patient bills and refine chargemasters.

In May, Mercy bought Ensemble Health Partners, a revenue-cycle firm based in Huntersville, N.C., for $60 million. The deal could be worth an additional $50 million if “certain metrics are achieved,” the system said in its financial report.

Other health systems, including Dignity Health and Ascension Health, have acquired revenue-cycle companies to help more with bill collections and explaining what patients owe. More people with job-based health insurance and individual coverage have high-deductible policies, which puts more pressure to collect money on hospitals and doctors.