Penn Health System posts a 9.8% revenue gain for fiscal 2015

The University of Pennsylvania Health System, already the Philadelphia region's largest, posted the biggest percentage gain in revenue among the area's Pennsylvania hospital systems that have reported preliminary financial results for the fiscal year ended June 30.

Penn logged $4.3 billion in revenue, up 9.8 percent from $3.94 billion the year before, driven in part by the inclusion of a full year of revenue from Chester County Hospital, which Penn added to its system in September 2013.

Last month, Penn acquired Lancaster General Health. That organization's $1 billion in revenue was not included in Penn's fiscal 2015 results, but the deal ensures that Penn's total revenue will easily exceed $5 billion next year, compared with $3 billion in 2010.

While Penn reported its second straight year of increased operating profits, two other significant systems narrowed their losses: Crozer-Keystone Health System in Delaware County and Einstein Healthcare Network, with hospitals in Philadelphia and Montgomery County.

Einstein, with roughly flat total revenue of $1.1 billion, reported a $1.05 million operating loss in the 12 months ended June 30, compared with a $20.85 million loss the year before.

Crozer reduced its operating loss to $8.39 million from $32.91 million, while its total revenue was down slightly, to $762.61 million from $765.83 million.

Jefferson, which split from Main Line Health at the end of fiscal 2014, joined forces with Abington Health in May. It had nearly $3 billion in revenue in fiscal 2015, but did not report combined results for Jefferson and Abington for the year before. Jefferson's operating margin was 2.5 percent in fiscal 2015, compared with 8 percent for Penn.

The local improvements came as Moody's Investors Service last week raised its outlook for the not-for-profit and public health-care sector to stable from negative, where it had been since 2008.

"The outlook revision represents significant gains in the number of people with insurance, growing patient volumes, and sizable reductions in bad debt that are contributing to very strong growth in operating cash flow," Moody's and senior analyst Daniel Steingart said in a news release.

Several of the region's largest health systems - Children's Hospital of Philadelphia, Main Line Health, and Temple University Health System, have not yet reported preliminary 2015 results.

Two smaller systems - Holy Redeemer Health System and Doylestown Health - each reported gains in revenue and operating profit, though their operating profit margins remain narrow.

Most New Jersey health systems report financial results on a January-December calendar-year basis.

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