Erlanger Reports $12.7 Million Gain For 2nd Quarter

Erlanger Health System, which earlier suffered several years of record losses, on Monday evening reported a surge of income for the second quarter of the fiscal year.

Erlanger officials said revenues over expenses for the quarter were $12,744,133.

The budgeted gain had been $2.5 million.

Erlanger has $20.4 million in profits in the first six months of the fiscal year.

A large number of hospital staff members were at a hospital board meeting to celebrate the good news.

Also at the meeting, Erlanger announced over $1 million in cancer treatment improvements at the Erlanger East campus, including construction of an outpatient infusion center and medical oncology clinic.

Erlanger is also constructing elective orthopedic surgery suites on the sixth floor at the main Erlanger campus. That is expected to cost $8 million. Officials said orthopedic surgery has run out of room. There will be four brand-new surgery suites along with ancillary services. Part of the floor is now vacant.

Britt Tabor, finance director, outlined $47 million in savings and new income he said the hospital had secured. He said a similar presentation was made on Wall Street recently, which president Kevin Spiegel said was "extremely successful." He told board members that Erlanger had made a $27 million turnaround.

Mr. Tabor said Erlanger had increased its market share from 30.9 percent to 32.1 percent.

He said $3.1 million was saved by shaving a half day from length of stay.

Mr. Tabor cited large savings by changing supplier contracts, reducing overtime and streamlining the work force "without major layoffs," and contracting out such services as environmental services.

A $4 million savings was made in the pension plan and $1.5 million savings in eliminating post retirement benefits. Mr. Tabor said the Erlanger pension had been "rich" and was taken to "market rate." He said few other hospitals were still offering post retirement benefits. 

He cited $71 million in new capital investment at the hospital, including boosting the Gunbarrel Road operation and planning major improvements at Children's Hospital. He said, counting ongoing capital, the total was over $100 million in a year. "That's huge," he said.

Mr. Spiegel said, "We have probably invested more money this year in the hospital than we have in all the years since the Medical Mall."

He said Erlanger's path to positive budgets "is sustainable. We have moved from a year to a year and a half of positive gains."

Mr. Tabor said Moody's raised Erlanger's status from negative to stable, and Fitch gave a stable rating as well.

Part of the turnaround involved Erlanger getting $19.5 million from the public hospital pool.

For the quarter, surgical inpatients were 4.1 percent over budget and 8.7 percent up from the prior year.

Surgical outpatients were 5.8 percent over budget and 1.8 percent greater than last year.

Emergency room visits were 11 percent over budget and 9.7 percent higher than last year.

Physician practice outpatient visits were 22.6 percent greater than last year.

Cath lab procedures were 36.7 percent over budget and 32.7 percent greater than the prior year.