Sutter Health Posts 77% Rise in 2001 Operating Income on ‘Strong’ Earnings at Five Sacramento-Area Hospitals

Sacramento-based Sutter Health reported $53 million in operating income last year, a 77% increase over 2000, as a result of a "remarkably strong financial performance" by five of the health system's Sacramento-area hospitals, the Sacramento Bee reports. Sutter Health, a system of 26 hospitals and 12 medical groups in Northern California, posted $4.2 billion in revenues in 2001, earning about 25% of that amount at Sutter General Hospital and Sutter Memorial Hospital in Sacramento, Sutter Roseville Medical Center, Sutter Davis Hospital and Sutter Auburn Faith Hospital. The five hospitals reported $46.8 million in operating income on revenues of $915 million for a "strong" 5.1% operating margin. "I don't think there's just one factor that got us here. It's a combination of increased revenue, strong patient volumes and good expense management," Sutter Sacramento-Sierra region CEO Sarah Krevans said. Sutter also reported an increase in operating margin, from less than 1% in 2000 on $775 million in revenues and $10.4 million in operating income, to 1.25% in 2001 on $3.5 billion in revenues and $30 million in operating income. However, Sutter has not reached the 3% to 4% operating margin required to fund $3.5 billion in planned capital projects, the Bee reports (Rapaport, Sacramento Bee, 4/26).