By Carrie Ghose
OhioHealth assets nearing $5 billion with O’Bleness, MedCentral additions
OhioHealth Corp. reported a thinner operating margin of 6.7 percent in its 2014 audit, amid new construction, hospital acquisitions and a one-time expense to install a new electronic medical records system throughout all its physician practices.
Central Ohio’s largest hospital system had revenue of $2.77 billion in the year ended June 30, a 9 percent increase over the prior year. Its operating margin was $185 million, down 14 percent from 2013’s $215 million.
The system outperforms peers: median operating margins for U.S. nonprofit hospitals have been between 2 percent and 3 percent the past five years.
OhioHealth enlarged its assets by $816 million to $4.9 billion. Almost all that growth represented net assets, which increased by $675 million to $3.3 billion from $2.6 billion.
Included in that increase was a $248.5 million non-operating gain from the net assets of two acquisitions: of OhioHealth O’Bleness Health System in Athens midway through the fiscal year and OhioHealth MedCentral hospitals in Mansfield and Shelby as of March. No cash exchanged hands in the transactions.
OhioHealth had 11 hospitals as of June 30 but has since ended inpatient services at its Nelsonville facility. O’Bleness and MedCentral combined for an operating loss of $1.5 million in their time with the system. From January through June, O’Bleness had $47 million in revenue; from March through June, MedCentral had $83 million in revenue.
In an earlier third-quarter report to investors about its tax-exempt bonds, OhioHealth attributed the decline in operating income to the software installation and one-time gains from the prior year.
The total investment in the software is $229 million, including $129 million expense remaining for fiscal 2015, the audit said. The system also has $112 million in projected expenses remaining in a $316 million expansion of OhioHealth Riverside Methodist Hospital, which is set to open next year.
OhioHealth reports its Central Ohio market share is 44.6 percent.
A message seeking comment was left with the system.
