Trinity sees operating margin improve as patient volume grows

Livonia, Mich.-based Trinity Health posted strong operating results for fiscal year 2015, with the system reporting its operating income grew to $470 million, up 17.4 percent from the year prior.

Strong patient volumes at Trinity's facilities helped fuel revenue growth in FY 2015, with the system's total unrestricted revenue climbing to $14.3 billion, up 7 percent compared to FY 2014. The system was also able to reduce provisions for both bad debt and charity care in the most-recent fiscal year, which was attributable largely to Medicaid expansion in certain markets, according to Trinity.

Trinity's 3.3 percent operating margin for FY 2015 was an improvement over the 3 percent operating margin the system posted for the year prior.

The system was able to keep its expenses in check in FY 2015, with total operating expenses climbing 6.7 percent year over year. The biggest contributor to the increase was labor expenses. Due to patient volume growth, Trinity increased its full-time employment count by 2.3 percent in FY 2015, which caused the system's expense for salaries and wages to rise.

Trinity ended FY 2015 with a net surplus of $637 million, a drop of about $352 million from the year prior. The decrease was primarily due to a $500 million decrease in nonoperating investment income, a $97 million non-cash loss from extinguishment of debt and an $83 million reduction of equity in earnings of unconsolidated affiliates, according to the system.

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