Dive Brief:
- Sacramento, Calif. based Sutter Health announced this week that its operating margin increased in the first quarter to 3.8% from 2% in the prior-year period.
- The health system is experiencing diversified revenue streams, increased admissions and more patients covered by health insurance.
- Sutter also got a boost from the reinstatement of California's provider fee program, which contributes payments to hospitals serving low-income Medi-Cal patients.
Dive Insight:
Sutter has credited the increase to its medical foundations, home-care services and ambulatory surgery center joint ventures, which are all contributing toward a more diversified revenue mix, as Modern Healthcare notes. It adds that Sutter's first-quarter hospital admissions were fairly static year over year, while emergency department visits increased 13.4%.
The health system also disclosed this week that it agreed to a $3 million settlement with the U.S. Justice Department regarding an investigation into its use of implantable cardioverter defibrillators in Medicare patients. In addition, Sutter is the subject of an ongoing investigation into its financial arrangements with physicians.