News Column

Sentara sees its operating income decline in 2013

May 23, 2014

By Amy Jeter, The Virginian-Pilot

May 24--Medicare cuts and audit recovery shaved Sentara Healthcare's operating income and decreased its operating margin in 2013, executives said.

The Norfolk-based health system reported $221.8 million in operating income on revenue of $4.3 billion for the fiscal year ending in December, according to audited financial statements released by Sentara. The prior year's operating income was $263.8 million on revenue of $4.1 billion.

The nonprofit's 5.2 percent operating margin declined from the prior year's margin of 6.5 percent.

Robert Broermann, Sentara's chief financial officer, said the health system was hurt by federal budget cuts, an unusually aggressive audit recovery effort by Medicare and a smaller incentive from the government for use of electronic medical records.

The system also experienced a loss of $2.5 million from its merger with Halifax Regional Health System in south-central Virginia, mostly from one-time costs associated with completing the deal, Broermann said. The agreement was finalized in July.

Revenue from patient services increased by 4.9 percent to $3 billion. However, the cost of uncompensated care provided by Sentara -- including charity care, unpaid care that was written off and losses from Medicaid -- rose by 7.6 percent to $277.6 million.

Sentara completed a lease agreement to run Albemarle Health in Elizabeth City, N.C., in March. The health system now employs 28,000 people and operates 12 hospitals in Virginia and North Carolina, as well as nursing homes, outpatient centers, home health services, a physicians group and a health insurance company.

Amy Jeter, 757-446-2730,


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Source: Virginian-Pilot (Norfolk, VA)

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