After posting many months of losses, Erlanger Health System reported a profit of over $2 million for August.
Members of the hospital's finance committee were told Monday afternoon that the gain was $2,016,227.
Some bright spots included:
Surgical outpatients 7.9 percent over budget
Emergency room visits up 3.7 percent over the prior year
Cath lab procedures 47.8 percent over budget
Erlanger officials gave this report to employees:
In January, Erlanger embarked on a bold financial recovery plan that began with a leadership and management reorganization. These steps were necessary in order to overcome the serious financial challenges Erlanger was facing. Based on our monthly losses through December, our run rate was annualizing to a $20 million loss for fiscal year (July 1, 2011- June 30, 2012).
Through proactive and thoughtful actions, backed by the dedication and hard work of our employees and medical staff, our strategic initiatives proved effective. Solid decision-making and a strong team effort enabled Erlanger to “make up” over $10 million of the annualized losses by the end of the fiscal year. In his yearly report to our Budget and Finance Committee tonight, CFO Britt Tabor announced that Erlanger ended its 2011-12 fiscal year with a loss of $9.5 million.
In his report to trustees, Mr. Tabor also noted that Erlanger provided in excess of $85 million in healthcare services to our community this past fiscal year, far more than any healthcare provider in the region. This was a significant increase over previous years, and we should be proud of achieving this level of corporate social responsibility.
Anticipating that our losses could lead to breaking some of our bond covenants, Erlanger’s Board and leadership took decisive action and hired a business partner to help accelerate our recovery. This collaborative business partnership was reviewed and met with the approval of our bond insurers. Although we achieved all of the Master Trust Indenture bond covenants, Mr. Tabor reported that Erlanger did not achieve one covenant required in the bond insurer agreement. However, with the decisions and actions being taken now, he said we have every expectation of achieving all bond covenants by the end of this fiscal year.
Ms. (CEO Charlsetta) Woodard-Thompson reiterated that she was extremely proud of what our employees and medical staff achieved this past fiscal year, noting that we made great strides managing our financial health while continuing to provide exceptional care.
August 2012 Financial Report
Acknowledging the hard work of our employees and physicians, Mr. Tabor reported that Erlanger had $2 million in excess revenues in the month of August, with a year to date profit of $427,749.
While surgical inpatients were 8.5% under budget in August, Erlanger’s surgical outpatient volume was 7.9% over budget and 5.2% greater than last year. Our surgical mix was 31% for the month.
Other highlights included August cath lab procedures, which were over budget by 47.8% and commercial insurance utilization which was up, across all payors, by 13.8%.
Erlanger’s emergency room visits were on budget and 3.7% higher than last year .
Paid FTE’s per adjusted occupied bed was 5.03, compared to our budgeted 5.40, and our cost per adjusted admission was better than budgeted.
Admissions were under budget 2.7% for the month and under the previous year by only 0.7%.
Mr. Tabor also reported that, two months into this fiscal year, Erlanger has already provided more than $14.2 million in health care services to our community as part of our corporate social responsibility.
Donnie Hutcherson, Budget and Finance Committee chairman, noted that “the past fiscal year was challenging and represented a period of change, but I am extremely pleased with the start of this fiscal year and look forward to a promising year.”
September Board Resolutions
Four resolutions were approved by the Budget and Finance Committee at tonight’s meeting.
Erlanger CNO/COO Lynn Whisman sought the committee’s approval for the purchase of a $413,000 radiographic fluoroscopic system for Children’s Hospital. Mr. Morris explained that this second system will provide radiation dose reduction for our pediatric population and reduce a current backlog for swallow studies.
Ms. Whisman also asked the committee to approve the renovation, expansion and technology update of Operating Room 21 at a cost of $505,000. The objective of this funding request is to create capacity for a second, temporary vascular suite to better accommodate today’s patient population and surgical expectations.
Gregg Gentry, Erlanger CAO, presented a resolution approving the pension contribution for fiscal year ending 2013. Mr. Gentry emphasized that the traditional pension plan is a tremendous retirement benefit for employees, and sought committee approval for management to contribute $11 million during FY 2013.
Mr. Gentry also asked the committee to approve the renovation and relocation of Erlanger’s Medical Library to the WhitehallMedicalBuilding. This effort, at a cost of $901,000, is to accommodate the expansion our surgery area and its support departments. The space currently occupied by the Medical Library will be converted into the Surgical Ambulatory Care Waiting Area and Surgical Ambulatory Care Unit, freeing up other space for surgical expansion.
Ron Loving, Chairman of Erlanger’s Board of Trustees, said that he was pleased with how our organization was responding to change and with the willingness of employees and medical staff to engage and participate in Erlanger’s accelerated recovery plan. Mr. Loving said that, by working together, we have achieved remarkable progress and are regaining our financial footing, while still leading the way in corporate social responsibility. “Thanks to the exceptional work by employees and physicians, we are moving towards a much stronger health system.”
Excess revenues before interest, taxes, depreciation and amortization were $4.7 million.