Erlanger Health System officials said Monday the hospital lost $93 million over a three-month period due to the COVID pandemic, but made it up with cuts and federal stimulus funds.
The health system reported net income from operations for the first quarter of Fiscal Year 2020-2021 of $12.6 million, including $7.8 million in CARES Act funding.
Britt Tabor, finance director, said $47 million was saved through spending reductions. He said Erlanger was one of the first hospitals to begin paring back as the virus began to make its mark.
He said April was the lowest financial point, but that income from surgeries again began to take off as soon as a surgical mandate was lifted. He said Erlanger performed some operations on May 1 - the very first day they could resume.
Mr. Tabor said hospitals are able to use the federal funds for items such as covering operations losses and for capital items such as purchase of ventilators.
He said before the pandemic hit Erlanger had already decided to cut back on recent record levels of capital spending - up to $60 million. He said $36 million was in the last budget for capital spending and $20 million in this budget as belts were tightened.
Mr. Tabors said the emergency room is one area that has not yet picked back up due to fears by patients that they might catch COVID in the hospital. Officials said they continue a campaign that the hospital "is open and safe."
Practices by doctors associated with Erlanger are up by 11 percent, it was stated.
Mr. Tabor said Erlanger has not had to draw on any line of credit during the crisis.
He said, "Some other hospitals have lost hundreds of millions of dollars."
Erlanger Trustee Jim Coleman, who heads the finance panel, said, “It’s a true testament to the Erlanger team and leadership that they never faltered while facing the uncertainty of this pandemic, and the financials show the organization is not just surviving but thriving. Some might look at the stimulus funds and say that they are a short-term impact, but in truth such funding was a necessity for almost every hospital in the country, as the impact of COVID will not be truly realized for years to come.”
President Will Jackson said, “I am extremely proud of the efforts and devotion of the entire organization. By any objective standard, the results of the past 12 months are simply extraordinary. Erlanger is an essential civic asset for Chattanooga and the region, and our associates took this to heart, sacrificing personally, and often at risk of their own health, to ensure the sustainability of the enterprise for their family, friends and neighbors. While uncertainty around the economy and pandemic remains, we have done everything possible to continue the mission, and I am grateful for the faithfulness of our staff.”
The board's finance committee approved the purchase of a new $1.8 million Da Vinci surgical robot, replacing one that is eight years old and for which parts are difficult to obtain. It will be stationed at Erlanger East on Gunbarrel Road.
The hospital recently lost three vascular surgeons and officials said an incentive was needed to lure one to the hospital after another was hired recently. The incentive amounts to $1.34 million over two years. That includes $900,000 in compensation over 24 months, $117,400 in one-time expenditures such as moving, and office opening costs of over $200,000.
The physician agrees to stay at least four years or begin repaying the money.