Kaleida Health in 2016 achieved a third year in a row of positive -- and improving -- year-end financial results.
The hospital system reported earning $30.3 million in operating income last year on nearly $1.5 billion in revenue, a 2 percent margin. That's up from the $23.2 million it earned in 2015 and $15.2 million in 2014. The organization reported a $15.3 million loss in 2013.
"When we came to together 3 ½ years ago, our goals were set on physician engagement, improving quality, growing top-line revenue, efficiencies, all of the things you see being borne out with the numbers," said Jody L. Lomeo, chief executive officer.
Among other financial highlights:
-- Total operating expenses increased from $1.37 billion in 2015 to $1.46 billion in 2016, with salaries and wages increasing 8.7 percent from $591.1 million to $642.8 million.
-- Total assets increased to $1.42 billion from $1.32 billion in 2015, $1.26 billion in 2014 and $1.22 billion in 2013.
-- Total average cost per case was $8,492 in 2016, compared with $8,580 in 2015, $8,555 in 2014 and $8,918 in 2013.
-- Inpatient cases, such as heart and general surgery, increased by 761, or 1.4 percent over 2015.
-- Outpatient visits, such as for laboratory tests and clinic visits, were up by 20,550, or 3.1 percent.
Kaleida Health includes Buffalo General Medical Center, Women & Children's Hospital, Millard Fillmore Suburban Hospital in Williamsville, DeGraff Memorial Hospital in North Tonawanda, and the Gates Vascular Institute. The hospital system has also partnered with other facilities in the region, including Cuba Memorial and Brooks Memorial in Dunkirk.
Lomeo said one of his goals since taking the reins at Kaleida Health in 2014 was to rebuild the system's connection with the community beyond its focus on the Buffalo Niagara Medical Campus and its core hospital system, which primarily served inpatients.
"So that's coming to fruition as well," he said.
Lomeo said growth in patient service revenue came from both inpatient and outpatient lines, and includes Western New York Urology, a practice that Kaleida Health acquired in 2015, as well as the system's Visiting Nursing Association of Western New York.
He said he is not worried about the rising expenses of salaries and benefits.
"When you think about the trajectory that we're on, I mean, the reality is you're going to spend money and make the investment, and the best place that we know of for us with our money and our investment is in our people," Lomeo said.
Officials talked about their goal of focusing on efficiency to drive revenue and control costs.
"Efficiency not only helps on the expense side, it helps on the revenue growth side," said Dr. David P. Hughes, Kaleida Health's executive vice president and chief medical officer. "Because people want to come and operate in our hospitals. People want to come and do business in our outpatient centers. Our affiliates want to come and do business with us."
Hughes said Kaleida Health officials can't get too caught up in worrying about how federal health care reform would affect the system's bottom line, but they prepare for any eventuality while focusing on serving their patients.
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