Bon Secours Health System reported a drop in operating income and revenue for the nine-month period that ended on May 31, Modern Healthcare reported. Despite the lower income and revenue, Bon Secours still saw a net surplus of $105.1 million, which was thanks in large part to an investment gain of almost $75 million.
The Marriottsville, Md.-based Catholic health system reported $58.1 million operating income and $2.5 billion revenue, which was down from $81.3 million and $2.4 billion, respectively, during the same time period the previous year.
The 19-hospital nonprofit system reported a 2% increase in outpatient visits during the nine-month period and hospital discharges decreased slightly.
The health system is seeing a similar trend as many other hospitals — more outpatient services and fewer hospitalizations.
With less need for hospital beds, health systems are looking at growing its outpatient services. A recent Advisory Board Company survey found that 57% of hospital CEOs said improving access to ambulatory or outpatient settings is their primary concern. The same percentage said they were concerned about reducing expenses, while 55% wanted to increase their share of the outpatient procedures market.
Why the greater move to outpatient services? Hospital utilization and hospital beds are declining, inpatient reimbursement rates are sagging and expenses are rising. This is causing providers to look for more cost-effective care options, such as outpatient services.
Decreasing reimbursements are causing hospital pain throughout the country. It’s causing some systems to look at consolidation, such as Mayo Clinic, and others to look at sharply reducing the number of hospital beds and expanding more potentially profitable areas, such as DeGraff Memorial Hospital in New York.
Bon Secours Health System's investments helped the system stay profitable through the nine months, but it's dropping revenue highlights the issue many hospitals face. Health systems, especially community hospitals, are trying to find the right balance of offering a breadth of services, while rethinking their offerings to find the most profitable path forward.