Lynn DeJaco gives budget review
Erlanger Health System officials said the local public hospital is outperforming many hospitals across the country financially.
During the April Board Budget and Finance Committee meeting, Erlanger Health System reported FY 2022 year-to-date net income from operations of $27.1 million compared to a budget of $22.1 million. Erlanger also reported $7.3 million net income from operations for the third quarter, a 2.7 percent operating margin. These third quarter results exceeded budget even as Erlanger experienced high COVID volumes for the first two months of the quarter, officials said.
Lynn DeJaco, chief financial officer, said many hospitals are in the red in recent months, but Erlanger income is five percent above expenses at the end of the third quarter.
"We are $5 million ahead of budget," she said.
Erlanger Trustee Warren McEwen, who heads the finance committee, said, "Net operating income of $27 million fiscal year to date exceeded budget and puts Erlanger in an optimal financial position for the year. Erlanger remains committed to providing accessible, compassionate, high-quality care while remaining fiscally responsible to deliver stable financial results.”
Ms. DeJaco said hospital labor costs continue to rise with some contract nurses fetching as much as $200 per hour. The average is $130 per hour.
She said Erlanger has focused on getting along without the high-cost contract services, while raising nursing rates and paying overtime.
The average Erlanger salary was $38.50 per hour last July, and it has risen as high as $42 per hour, she said. At the end of March, it was at $41.50.
Ms. DeJaco said Erlanger and other hospitals had to deal with a high number of COVID-19 patients in January, then a sharp drop in February.
She said Erlanger was able to pick back up pretty quickly on outpatient services, while some other hospitals did not recover so quickly.
Ms. DeJaco said there was a drop from 164 days cash on hand to 151 days, but she said it has been important to pay vendors promptly given supply shortages.
The third quarter numbers include $12 million in capital expenses as well as three pension payments.
The hospital added Jeanna Adler as vice president for finance.