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Health systems in the Milwaukee area have seen a sharp increase in profits since the expansion of health insurance through the Affordable Care Act.

That wasn't the initial expectation.

Analysts at rating agencies, such as Standard & Poor's, initially were guarded in how the legislation would affect health systems. But so far, the law has helped the bottom lines of health systems in the Milwaukee area.

The same trend overall can be seen throughout the country.

A key reason: Health systems are providing less charity care and incurring fewer bad debts.

"It's all relative, but in general, we are seeing improved performance," said Martin Arrick, an analyst who follows nonprofit health systems and hospitals for Standard & Poor's.

A slew of other factors — including health systems' work to control costs and become more efficient — contributed to the increase in profits in the Milwaukee area.

Still, the numbers are telling:

■ Aurora Health Care's operating income was up 221% in 2014, increasing to $503 million from $156.8 million in 2013. For the first nine months of 2015, operating income fell slightly to $337.5 million when compared with the same period in 2014. But that was more than triple the operating income of $92.4 million reported for the first nine months of 2013.

■ Wheaton Franciscan Healthcare's operating income was up 158% for its fiscal year ended June 30, increasing to $69.2 million compared with $26.8 million in its 2014 fiscal year.

■ ProHealth Care's operating income was up 125% for its fiscal year ended Sept. 30, increasing to $37.8 million compared with $16.8 million for its 2014 fiscal year.

■ Froedtert Health's operating income was up 79% for its fiscal year ended June 30, increasing to $149 million compared with $83.4 million in its 2014 fiscal year.

■ Columbia St. Mary's operating income was up 26% in its fiscal year ended June 30, increasing to $26.1 million compared with $20.7 million in its 2013 fiscal year.

At least some of those gains have come from the increase in people with health insurance, either through the subsidized health plans sold on the federal marketplaces or the state's partial expansion of its Medicaid program.

For example:

■ Froedtert Health's bad debt expense fell by $40.2 million, to $33.2 million, while the cost of providing charity care fell by $14.2 million, to $7.6 million, in its fiscal year ended June 30.

■ Wheaton Franciscan's bad debt expense fell by $29.6 million, to $44.9 million, while the cost of providing charity care fell by $15 million, to $34.5 million, in its fiscal year ended June 30.

At the same time, the health systems are seeing more patients, in part because people previously uninsured are likely to schedule an appointment with a doctor.

Health systems in the Milwaukee area, which has a high rate of poverty, may have benefited more from the increase in people with health insurance than health systems in other parts of the state and country.

Roughly 50,000 people in Milwaukee County gained coverage through the partial expansion of BadgerCare Plus, the state's largest Medicaid program.

And 52,115 people in the Milwaukee market had enrolled in health plans sold on the federal marketplace at the end of the open-enrollment period last year. That number dropped over the course of the year, and an unknown percentage of the people previously were insured. But 89,480 people signed up for coverage in the open-enrollment period that ended Jan. 1, a 72% increase.

Medicaid programs such as BadgerCare Plus generally pay far less than the cost of providing care. But Arrick of Standard & Poor's noted that still is a good trade off if someone previously was uninsured.

Many people who have gained coverage have commercial insurance, which pays higher rates.

The benefits can be seen in the health systems' operating margins — their operating income as a percent of operating revenue.

An operating margin of 3% to 5% is "a good place to be," Arrick said.

Jennifer Gingrass, a principal with ECG Management Consultants, agreed.

An operating margin of more than 3% is considered solid, she said, and 4% to 5% is considered good.

By that measure, the adult health systems in the Milwaukee area also are doing well:

■ Aurora had a 10.7% operating margin in 2014, up from 3.7% in 2013. For the first nine months of 2015, its operating margin was 9.3%.

■ Froedtert Health had a 7.9% operating margin in its fiscal year ended June 30, up from 5% in its 2014 fiscal year.

■ ProHealth had a 5% operating margin for its fiscal year ended Sept. 30, up from 2.4% in its 2014 fiscal year.

■ Columbia St. Mary's had a 4% operating margin for its fiscal year ended June 30, up from 3.3% in its 2014 fiscal year.

■ Wheaton Franciscan had a 3.8% operating margin for its fiscal year ended June 30, up from 1.5% in its 2014 fiscal year.

That said, the financial results in any given year are no more than a snapshot.

Wheaton Franciscan's operating income fell to $3.6 million in the first three months of its 2016 fiscal year, for example, compared with $9.6 million for the same period in its 2015 fiscal year.

The most recent financial results also include an array of payments that are going away.

For example, the Affordable Care Act temporarily increased Medicaid payments for primary care physicians. That added $12.7 million to Aurora's bottom line in 2014, Gail Hanson, Aurora's chief financial officer, said last summer.

And health systems that moved to electronic health records are receiving incentive payments from the federal government. Aurora received $26.8 million in 2014.

Other health systems also benefited from both.

Aurora has been a standout. But the health system has cut costs in recent years. It completed the implementation of Epic Systems software for electronic health records. And it, too, has seen a drop in its bad debt expense and the cost of providing charity care.

Aurora also has gained market share by offering attractive prices to health plans sold on the federal marketplace. Most of those plans initially were tied to Aurora's network of hospitals and clinics.

Aurora's revenue jumped to $4.7 billion in 2014, an 11% increase from $4.2 billion in 2013.

Still, the numbers posted by many health systems since the Affordable Care Act have been somewhat of a surprise.

The unknown is whether the overall strong profits at health systems in the Milwaukee area will keep a check on future increases in prices.

Health systems, like most organizations, face their share challenges and uncertainty.

The Affordable Care Act partially pays for the cost of expanding coverage by reducing future increases in the Medicare rate. The law also includes payments and penalties tied to how well hospitals perform on measures of quality and efficiency. And Medicare now penalizes hospitals with high rates of potentially preventable readmissions.

Health systems also are preparing for the expected move away from so-called fee-for-service — in which they are paid based on the services they provide — to new payment models that could put more focus on costs and quality.

"The bigger five- to 10-year outlook is still complicated and sort of stable at best," Arrick said. "The near term has been positive."