News Headlines Article

Sutter Health wrestles with increasing costs as admissions remain flat
Modern Healthcare

Sutter Health continued to see rapid growth in outpatient visits last year, while admissions remained flat. Those trends, along with rising expenses across the board, led to a pinched operating margin for the 25-hospital system.

The Sacramento, Calif.-based hospital group reported an operating surplus of $287 million on nearly $11 billion in operating revenue for the year ended Dec. 31, 2015. In comparison, it saw an operating surplus of $419 million on $10.2 billion in operating revenue in the previous year.

Its operating margin declined to 2.6% from last year’s 4.1%,Salary and benefit costs increased 8.8% year over year, purchased services were up 11.2% and supply costs grew 11.7%.Like many of its peers, Sutter Health’s business is transforming from inpatient to outpatient care.