Audit Highlights Erlanger’s Continued Net Patient Revenue Growth Of 13%; New Ventures Carried Out Despite $124 Million Uncompensated Care Expense

Monday, October 1, 2018

Erlanger Health System had positive year-end income of $1.7 million from operations and a significant EBITDA (Earnings Before Interest, Tax, Depreciation, Amortization) of $38.3 million, Erlanger’s Budget and Finance Committee was told Monday night.

 

Independent auditor partner Doug Arnold said the clean audit opinion occurred during a year in which Erlanger had in excess of $19 million in one-time costs associated with the EPIC electronic medical records implementation.  Even with planned volume reductions due to the EPIC conversion, Erlanger continued to grow in market share. 

 

Erlanger’s bottom line net income was $526,913, and other accomplishments in FY 2018 far exceeded those of previous years, the panel was told.

 

Mr.

Arnold characterized Erlanger’s latest audit results as “extraordinary under any circumstances.”

 

Erlanger CFO Britt Tabor noted that Erlanger continued its growth plan strategy by adding Erlanger Murphy Medical Center to the family, increasing the System’s net value in excess of $12.5 million on the balance sheet, with a projected $67 million in net revenue. He said, “It’s important to remember that during the fiscal year Erlanger successfully completed implementation of a $100 million best-of-class clinical information system (EPIC) which exceeds that of any other system in the region in terms of enhanced patient care, safety, and advanced mobility of patient records, through MyChart. 

 

“We fully anticipated lower profits last year due to the transformative installation and transition to EPIC as noted by the $5 million budgeted net income."

 

He said the EPIC investment was the largest strategic investment in Erlanger’s history, executed with the purpose of advancing quality.

 

Mr. Tabor said, “Although our state-of-the-art EPIC system was successfully implemented last year without any major interruptions in service, we did incur significant cost increases that other health systems have also experienced during this transition.”

 

Officials said Erlanger was able to make significant investments in its infrastructure and the community with the opening of the new $16 million Erlanger Heart and Lung Institute. With this major service initiative, Erlanger added four operating rooms and a hybrid facility for complex cardiac procedures, in addition to an onsite daVinci robot.  Erlanger also became one of the first facilities in the nation to use a minimally invasive angiography system, which avoids the need to open patient’s chests for cardiac procedures.  Also last year, Erlanger built a state-of-the-art onsite pharmacy.

 

Other significant achievements included the opening of the 88-bed Erlanger Behavioral Health Hospital, funded through a $25 million capital investment by joint venture partner, Acadia Healthcare. In addition Erlanger celebrated the opening of the new Southside Community Health Center in St. Elmo, the Erlanger Sports and Health Institute at the downtown campus and a new LIFE FORCE 6 station in Andrews, N.C.  

 

All these projects were completed on time and on or under budget, as is anticipated for the Children’s Hospital Outpatient Center, slated to open in December, it was stated. Erlanger was able to close on the largest philanthropic effort in its history last fiscal year, actually exceeding its $27 million philanthropic goal.

 

All the major growth efforts were achieved despite a record $124 million expense to the organization for uncompensated care. 

 

Also, the Budget & Finance committee approved the implementation of an OB hospitalist program to cover OB services at Erlanger East Hospital and Erlanger Baroness Hospital. Following a presentation by Erlanger COO Rob Brooks, committee members voted to approve a contract between Erlanger and Erlanger Regional Obstetrical Consultants (ROC) to furnish physician personnel to provide such coverage at both campuses.

 

The full board will vote on this resolution at Thursday’s board meeting.

 


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