UMass Memorial posts strong financials, expects higher EHR costs next year

UMass Memorial Health Care saw its operating income jump 148.5 percent to $72.2 million in fiscal year 2015, but the Worcester, Mass.-based health system took a hit on investments, causing its net income to take a tumble.

Although UMass Memorial's total revenue was down slightly in FY 2015, its net patient service revenue was up about 1 percent year over year. That small boost is attributable to an increase in patient volume. The health system's inpatient volume grew by about 2,000 patients year over year, according to a Telegram & Gazette report.

"We've seen a rise in acuity for our patients, sicker patients, and we've seen a rise in volume," Eric Dickson, MD, CEO of UMass Memorial told the Telegram & Gazette.

The health system kept its expenses in check in FY 2015. However, UMass Memorial expects higher EHR costs next year.

In July, the health system announced plans to adopt Epic's EHR platform, a project slated to cost $700 million over the next 10 years. UMass Memorial CFO Sergio Melgar told the Telegram & Gazette the health system posted about $1 million to $2 million in expenses related to the EHR project during 2015.

"The really big part of the investment will occur over the next two years, with the really significant part starting in January, in the next few weeks, as we start the design phase of the project," Mr. Melgar said.

After accounting for a net loss of $30.8 million on its investments, the health system ended FY 2015 with net income of $46.6 million, down 23.3 percent from the previous year.

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