LEBANON — With pandemic-related financial strains behind it, Dartmouth Health made a big swing back into profit in fiscal 2024, but the health care giant’s efforts to make the organization more efficient were buffeted by higher operating costs.

Operating gain — called operating profit in many instances — was $41.9 million for the year compared to a $45.3 million loss in fiscal 2023, a whopping $87.2 million swing from loss to profit despite higher operating expenses across the board for the year.

DH “successfully completed its first full fiscal year of operations since implementing its performance improvement plan,” it said in reporting annual financial results to bondholders, adding that the efficiency program begun in 2023 led to “immediate improvement” for the health care system.

DH is the umbrella entity which encompasses Dartmouth Hitchcock Medical Center, Alice Peck Day Memorial Hospital, New London Hospital, Mt. Ascutney Hospital and health center, and other northern New England medical providers.

Expenses for the year reached $3.6 billion, up $418.7 million, or 13.3%, from the prior year.

The increase in operating expenses were due to incorporating a full year of expenses from DH’s 2023 takeover of Southwestern Vermont Health Care in Bennington — which accounted for more than half the rise — and DH’s growth in the contract and specialty pharmacy business, according to DH’s fiscal 2024 financial report to bondholders dated Aug. 27.

Also pushing up operating expenses across DH were higher employee salary and benefits costs, which rose more than 12%.

DH noted that factoring out the SVHC takeover, total expenses for the year would have risen about 6% and employee costs would have risen nearly 5%.

Despite the sharp rise in expenses, the financial picture at DH showed significant improvement as it recovered from the financial strain of the COVID-19 crisis.

Excluding pandemic-related stimulus funds, DH posted an operating gain in three out of four quarters for the fiscal 2024 year compared to posting losses in three out out of four quarters in fiscal 2023.

For the fiscal year that ended June 31, DH reported total operating revenue increased $506 million, or 16.3%, to $3.6 billion from $3.1 billion in the prior fiscal year.

The gain was largely driven by a $394 million, or 16.4%, increase in net patient revenue, a boost that DH said is in part attributable to incorporating patient revenue of $171.5 million from SVHC. Net patient revenue is a standard metric in heathcare defined as revenue from all payors after accounting for discounts and contractual adjustments.

Also powering DH’s top line for the year was a $172.1 million, or 28.3%, increase in revenue “due to growth driven by the continued and ongoing successful expansion” of DH’s contract and specialty pharmacy business.

(DH operates on-site pharmacies within its system and affiliated medical centers, as well as “personalized 24/7 customer support to people with complex medical conditions such as cancer, hepatitis, and infertility,” according to its website).

During the final three months of the fiscal year, DH’s operating gain fell about 36%, or $17.3 million, to $30.5 million from $47.8 million in the year-prior period.

Total operating revenue for the final quarter increased nearly 13% to $960 million from $850.5 million.

But excluding one-time income from government sources such as stimulus funds — for a more reliable indicator of ongoing operations — fourth quarter operating gains increased 23% to $21.9 million from $17.8 million in the year-ago period, according to DH.

DH also said its unrestricted cash and investment portfolio now stands at a total of $1.4 billion, a leap of $317 million from a a year ago, thanks in part to a $124.7 million, or 11.9%, increase in its long-term investment pool.

Contact John Lippman at jlippman@vnews.com.