UNC, Duke systems post big gains in operating profit

Despite the fact that North Carolina has yet to expand Medicaid eligibility under the Affordable Care Act, some of the state's biggest providers are posting record profits.

The five-facility UNC Hospitals system posted an operating profit of $115 million for fiscal 2015, the Triangle Business Journal reported. That is quadruple its operating profit for 2014, and double what had been forecast for its budget. Net income, which included investment earnings, reached $159 million, the highest in four years and 80 percent higher than in 2014. The figures for the fiscal 2015, which ended June 30, are currently unaudited.

UNC benefited from a fully upgraded electronic medical records system and an expansion of available beds, according to the newspaper.

Meanwhile, The Duke University Health System also posted stellar numbers for fiscal 2015. Its operating income of $355 million was nearly quadrupled the 2015 figure, the Business Journal reported in a separate article, and represented an operating margin of 12 percent. Net income, at $408 million, was below 2012 and 2013's figures, but significantly higher than what was posted in 2011.

Duke officials said a longer average length of stay--6.8 days--helped to push the bed occupancy rate to 82 percent from 78 percent. The system also engaged in a cost reduction campaign, according to the second article.

A Duke spokesperson also said the system was "benefiting from major investments in facility and information technology investments after years of slow growth due to capacity constraints." The system also recently engaged in a campaign to seek input from patients and their family members.

North Carolina is one of 19 states that have yet to expand Medicaid eligibility. A large number of the states are in the South and Southeast.

Not all is rosy for the hospital systems. UNC is currently embroiled in a dispute with the U.S. Department of Health and Human Services Office of Inspector General regarding alleged millions in Medicare overbillings.

To learn more:
- read the UNC Triangle Business Journal article 
- check out the Duke Triangle Business Journal article

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