Two reports released last week show the financial strength of Conemaugh Health System and its parent company, Duke LifePoint Healthcare.
Leaders say the local health system's strong performance and additional resources provided by the national organization demonstrate the community benefits gained through the sale of the former nonprofit hospitals in 2014.
The Pennsylvania Health Care Cost Containment Council's financial report released Wednesday shows Conemaugh Memorial reported a positive operating margin of 7.6 percent on $388 million net patient revenue during the fiscal year that ended in June. Both figures were up from the previous year.
On Friday, LifePoint Health released earnings for the first quarter of 2017, showing net income of $64 million on revenue of $1.63 billion. That compares with net income of $23.9 million on revenue of $1.58 billion in the same period last year.
LifePoint is the majority owner of the joint venture Duke LifePoint Healthcare.
LifePoint Chairman and CEO William Carpenter III said recently acquired hospitals, such as Conemaugh, are key to the company's growth.
"Operating margins expanded year-over-year and sequentially," Carpenter said during Friday's first-quarter earnings call with analysts. "This reflects progress toward our strategy to bring acquired hospitals up from low single-digit to low double-digit margins within the first three years."
The company's strategy is to build up the new acquisitions over three years, growing the bottom line to 12 percent, Chief Financial Officer Mike Coggin said during Friday's call, noting the group of recent acquisitions collectively approached the 12 percent margin during the first quarter.
Conemaugh was among 17 hospitals that Brentwood, Tennessee-based LifePoint bought between 2014 and 2016. It also sold five others, the company said. The 17 combined to add about $2.4 billion a year in revenue to LifePoint.
"Clearly, the decision that we made three years ago to beome part of Duke LifePoint, as we look at it now in retrospect, was a great decision," Conemaugh President and CEO Steven Tucker said.
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