Erlanger Health Systems is projecting a $15.2 million profit in an aggressive "growth budget" for the upcoming fiscal year.
President Kevin Spiegel, who has led the public hospital to a succession of profitable years, said the projections are based on a TennCare waiver being renewed once again. He said if it is not renewed, then the hospital will have to completely rework the budget and make cuts.
The budget is based on the hospital making substantial investments in Erlanger East Hospital as well as expanded orthopaedic, oncology and cardiovascular programs at the main campus on E. Third Street.
Mr. Spiegel said, "This is probably the best budget Erlanger has ever had. We are doing things that previously had not been done."
Finance Director Britt Tabor said for many years Erlanger did not reinvest in facilities "and you saw the results."
Erlanger this budget year is spending $33 million of a $100 million investment to move to the EPIC electronic medical records system. Finance Director Britt Tabor said the first portion of that shift will take place next spring. He said, as employees learn the new system, there will be a drop off in productivity.
Erlanger will also be investing in employees, Mr. Spiegel said. The hospital has dropped use of expensive nurse temp agencies and offered more overtime to staff nurses. Mr. Spiegel said as the new specialty centers are built out and the Erlanger East expansion is finished, Erlanger will need to hire some 60 additional nurses, which he said will be a challenge to locate. The hospital hopes to save $4.4 million in overtime, temporary help and special wage differentials.
Erlanger is projecting salary costs to go from $32.43 to $33.30 per hour.
Salaries and benefits were $321.7 million in 2014/15 and $381.1 million in the current fiscal year. They are projected to rise to $420.7 million in the upcoming budget.
Group health insurance is up 14 percent and retirement benefits up 10 percent.
The Erlanger Medical Center is looking at a $12.8 million profit, ContinuCare $2.3 million and Erlanger Bledsoe $1.3 million. South Side/Dodson Avenue is pegged for a $1.3 million loss - down from $2.3 million in recent years.
The hospital is expecting a 10.6 percent increase in acute admissions and a 20.1 percent increase in inpatient surgeries.
Erlanger is expecting a return from adding more doctors to the staff, including those at Chattanooga Bone and Joint.
Budget downsides including drops in revenue through the Affordable Care Act. Medicare payments to Erlanger will be down $4.5 million.
Erlanger is hiring a second in-house attorney to hold down legal costs by not using outside attorneys as often.
Total operating expenses were $619.2 million in 2014/15 and $725.9 million this fiscal year. They are due to climb to $802.4 million.