OSU Wexner's operating margin cut in half on CFO's recommendation

In the healthcare industry, where median nonprofit hospital margins have been in the 2 percent to 3 percent range for the past few years, Columbus-based The Ohio State University Wexner Medical Center has stood out with double-digit margins.

However, Mark Larmore, who took over as Wexner's CFO Oct. 1, recently cut the annual operating margin reported to trustees in half, according to a Columbus Business First report.

Wexner reported a 13.7 percent operating margin for the fiscal year that ended June 30, but that number didn't account for about $130 million used to support OSU's medical school and to pay faculty physicians for their time training students and newly licensed physicians in residency programs, according to the report.

In a recent summary to trustees, Mr. Larmore said that after the support to the medical school was accounted for, Wexner ended FY 2015 with a healthy 7 percent operating margin.

Regarding why the hospital made the change, Mr. Larmore told Columbus Business First, "We thought the board should see it, including the cost the health system is incurring to support the mission."

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