University of Kansas Hospital gets revenue boost, but sees operating margin fall

University of Kansas Hospital reported an operating margin of 8.8 percent for the first quarter of its fiscal year 2016, down from a 9.8 percent margin in the same period a year ago, as the Kansas City-based hospital saw higher costs outpace revenue gains.

The hospital reported an increase in discharges and outpatient visits in the first quarter of FY 2016, with each climbing 12.1 percent and 7 percent, respectively.

That volume growth caused the hospital's first-quarter net patient revenue to jump 10.3 percent year over year. However, the hospital's expenses were up 12.2 percent in the first quarter, overshadowing the hospital's revenue growth. The most significant cost increases were associated with additional volume, such as a 9.5 percent increase in expenses associated with salaries and benefits.

University of Kansas Hospital ended the first quarter of FY 2016 with operating income of $34.7 million on $392.6 million in revenue. That's compared to operating income of $34.6 million on $353.5 million in revenue in the same period of last year.

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