Hospitals in the Twin Cities saw net income increase for a second consecutive year in 2013, according to a report released Wednesday, even as the number of patient days in the hospital continued to decline.

Collectively, 30 Twin Cities area hospitals reported net income of $641.1 million in 2013, up from $533.7 million in 2012, according to an annual report on hospital finances from Allan Baumgarten, an independent hospital analyst in St. Louis Park.

The improved financial performance was driven largely by investment income and other sources of non-patient care revenue such as government grants and philanthropy, Baumgarten said in an interview.

"For the fourth time in five years, inpatient hospital days declined in 2013," Baumgarten wrote in a report summary. "The decline in hospital days heightens the need for hospitals to prepare for a future where more of their revenue will be tied not to the number of hospital days and procedures, but to performance in caring for a defined population of patients within a budget."

Hospitals in the Twin Cities reported slightly better financial performance based on operations in 2013 — the first year since 2010 that the medical centers in the metro area collectively posted positive operating income, according to the report.

Wendy Burt, a spokeswoman for the Minnesota Hospital Association, said she could not comment on the report's findings for net income. But on operating income, the hospital association's data suggest that median operating income for hospitals and the broader health systems they operate declined slightly in 2013.

"We do agree that inpatient days are down," Burt said. She said the hospitals association's data shows "we have 40 hospitals in Minnesota that have a negative operating margin."

Hospitals have criticized Baumgarten's numbers because they focus just on hospitals, without factoring operations such as home care and nursing homes.

Baumgarten's report is based on federal data for 30 hospitals in the Twin Cities area, including three in Wisconsin. It includes Anoka, Carver, Dakota, Hennepin, Ramsey and Washington counties in Minnesota, plus St. Croix County, Wis.

Twitter: @chrissnowbeck