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Net income at the UC Davis Health System rose 13 percent in the fiscal year ended June 30. Preliminary financial reports show that demand for hospital services was up and that the system kept its expenses in check.
Profit for the academic medical center was up nearly 13 percent and revenue was up more than 28 percent. UC Davis Health reported net income of $33.4 million on revenue of $636.6 million, up from net income of $29.6 million on revenue of $619 million the year before.
The improved numbers reflect a high census at the region's busiest medical center. It has been nearly full, causing problems in trying to figure out where to put people. And while more patients mean more money in the door, they also create demand for more services, staff, space and other expenses.
The health system will need a strong bottom line to cope with looming challenges, said Martha Marsh, chief operating officer.
"The net gain is the engine that finances the system," Marsh said. "What we strive to do is be conservative. We need the net gain to pay for construction costs to meet seismic safety standards, accommodate programs we have to fund and pay for new ones."
The UC Davis Medical Center is the most profitable hospital around. It is the most expensive to operate too.
"UC Davis is the (medical) provider of last resort for this area and they are doing pretty well in terms of payments from the county," said Albert Lowey-Ball, a Sacramento healthcare consultant. "There is no longer evidence that beds are in excess supply as predicted - in fact, the reverse seems to be true. And they seem to be strong negotiators, able to get fairly good rates from health plans.
"The quality of management has something to do with it," he added.
Pretty much full: Net patient revenue is up because people are sicker and they are staying in the hospital longer than a year ago. The UC Davis Medical Center has been consistently running at about 90 percent occupancy.
That...