In the 2013 fiscal year ended June 30, San Francisco-based Dignity Health recorded $812 million in net income — more than six times its net income in FY 2012 — due mostly to massive earnings from investments.
Dignity Health's investment profit totaled $528 million. The Catholic-based health system also posted operating profit of $284 million, up more than fourfold from last year's operating profit of $62 million. Dignity Health's operating margin increased from 0.7 percent to 2.7 percent.
In a news release, Dignity Health President and CEO Lloyd Dean said the organization has worked aggressively to both reduce costs and improve the quality of care. He added these themes have been part of Dignity Health "long before passage of the Affordable Care Act."
Dignity Health CFO Michael Blaszyk said the health system will still face financial challenges over the next several years, especially since Medicare and Medicaid patients represent more than 60 percent of Dignity Health's payer mix. However, he sees positives in the healthcare reform law.
"As we evolve from a fee-for-service to pay-for-value system, reducing costs and achieving efficiencies will become even more critical," Mr. Blaszyk said in the release. "We are encouraged by the launch of the healthcare marketplaces and the expansion of Medicaid, as we think these will be important and meaningful ways to stabilize the system by allowing more people to obtain health insurance."
This month, Dignity Health also announced it created a joint venture revenue cycle company with Optum. The groups anticipate the new company, Optum360, will simplify the billing process and result in significant backend savings.
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