OC Hospitals’ Revenue Up 9.1% to $11.3B

Orange County’s largest hospitals grew revenue a healthy 9.1% in 2023, the third straight year growth has exceeded 7%, indicating a full recovery from the 2020 pandemic.

The 24 largest hospitals on the Business Journal’s annual list reported $11.3 billion in revenue for the year ended Sept. 30, 2023. The growth compares to 7.9% in 2022 and a 9.6% rise in 2021.

Net patient revenue declined 1% in 2020 when hospitals discouraged patients from coming because of the pandemic.

The hospitals rebounded to a combined $597 million profit, compared to a $3.5 million loss a year earlier. Twelve of the hospitals on the list reported a loss for this period.

Outpatient visits climbed 2.1% to 3.2 million. Total employment increased 9.9% to 55,024.

CHOC Jump

Orange’s Children’s Hospital Orange County (CHOC) was the biggest grower by percentage. Its 33% jump to $1.2 billion follows a 41% increase in the prior year. Its sister entity, CHOC at Mission Hospital, reported a 19% increase to $108 million.

CHOC’s growth was due to “an extremely high viral season” in late calendar year 2022 and the timing of certain supplemental Medi-Cal revenue, Kerri Ruppert Schiller, executive vice president and chief financial officer at CHOC, told the Business Journal.

“Similar to other children’s hospitals around the country, the incidence of severe flu, RSV and COVID-19 cases drove a 21% increase in inpatient days in the quarter ended Dec. 31, 2022,” the spokeswoman said.

CHOC last December announced it would merge this year with San Diego’s Rady Children’s Hospital.

UCI Tops

UCI Health once again retained its No. 1 position with the third straight year of double-digit growth—a 14% jump to $1.85 billion. It’s growing by opening new facilities and expanding its number of beds, which allows more regional transfers from outlying facilities.

The fastest-growing areas include orthopedics, neurosciences and cancer care.

“Ultimately, we are seeing more patients, across more easily accessible locations than ever before,” UCI Health Chief Executive Chad Lefteris said.

UCI Health, which has its principal facility in Orange, is currently spending $1.3 billion for a complex along Jamboree Road in Irvine. A cancer and surgery center should open this year followed by a new hospital scheduled for 2025. It’s also spending $975 million to buy four hospitals, including three in Orange County.

Another building boom is going on at No. 2 Hoag Memorial Hospital Presbyterian, which reported sales climbed 10% to $1.5 billion. It’s spending $1 billion to expand in Irvine.

Providence is a West Coast healthcare system with 52 hospitals including three of them in Orange County—St. Joseph Hospital in Orange, St. Jude Medical Center in Fullerton and Mission Hospital in Mission Viejo. Respectively, they placed fifth, sixth and seventh, reporting growth between 5% to 10%. If revenue at the three hospitals were combined, it would total $2.5 billion, which would make it the biggest system in Orange County.

“2023 was a remarkable year for the Mission family, and I really need to give all the credit to our physician partners and caregivers,” Mission Hospital Chief Executive Seth Teigen told the Business Journal.

“We now have more than 1,000 high-skilled providers on our medical staff—which is a remarkable achievement for a community hospital. That is one of the things that makes Providence Mission Hospital so unique, especially in a highly competitive health care market like Orange County.”

MemorialCare Orange Coast Medical Center reported revenue jumped 15% to $448.8 million while its sister Saddleback Medical Center increased 1.3% to $429 million.

MemorialCare is seeing growth in oncology as well as cardiovascular services, said Marcia Manker, CEO of both hospitals. The Saddleback Medical Center in October opened the Sarah & Taylor Nederlander Breast Center as part of a new Women’s Health Pavilion that it calls “the future of women’s health” (see story, page 16).

Four hospitals that reported a revenue decline are all part of Prime Healthcare, which has a dispute with CalOptima Health. the Orange County provider of healthcare coverage for low-income communities.

By: Orange County Business Journal

Also featured in: Becker's Hospital CFO Report