Despite lagging admissions during the economic recession, Erlanger hospital brought in $8.5 million in operating profits in the fiscal year that ended June 30, compared to $10.8 million the previous year, officials said Monday.
In this economic climate, two years of profitable operations - following a more than $15 million loss in fiscal year 2008 - are notable, Donnie Hutcherson, chairman of the budget and finance committee, said after the committee's monthly meeting.
AUDITED FINANCIAL STATEMENT FY 2010* Net operating income: $8.5 million* Net patient revenue: $483 million* Bottom line, including nonoperating expenses: $4.3 million* Total uncompensated care: $82 millionSource: Erlanger audited financial statements
The hospital achieved the turnaround largely by scaling back expenses in the face of lower admissions and a corresponding drop in net patient revenues, he said.
"That takes time. If you see admissions dropping, you don't immediately start reacting (by scaling back operations.) Once we figured out it was something that was not just an aberration, it takes a while to make the adjustment," said Hutcherson, an accountant with Henderson, Hutcherson and McCullough. "I'm pleased with Erlanger's performance during these tough economic times."
In fiscal year 2010 the hospital provided $82 million in uncompensated care.
Earlier this year the hospital's 120 departments cut expenses by trimming spending on supplies, consolidating divisions or finding other reductions, to meet a demand that they cut 5 percent from their budgets in the fourth quarter of the fiscal year.
The hospital's financial statements received high marks from CPA firm Pershing Yoakley and Associates, whose auditors found no disagreements with the hospital's accounting this year, for the fourth year in a row.
"That's a huge accomplishment," said Britt Tabor, chief financial officer, praising his financial team at the hospital's committee meeting.
Erlanger's bottom-line profit - which includes nonoperating income and expenses, such as interest expenses and investment income - was $4.3 million, an improvement over last year's $3.1 million bottom line, according to financial statements.
A drop in variable interest rates on the hospital's bonds helped cut Erlanger's interest expense and offset losses on its investments in the fiscal year, Hutcherson said.
The income figures include a $2.9 million disproportionate share payment from the state of Tennessee and $1.3 million in trauma funding for the Level I Trauma Center. Also included was a cost settlement of $2.1 million in Medicaid payments for the Southside and Dodson Avenue Community Health Centers.
In August, Erlanger brought in $110,583. Admissions both to the pediatric emergency room and to T.C. Thompson Children's Hospital have been down, for unknown reasons, officials said.
Contact Emily Bregel at ebregel@timesfreepress.com or 423-757-6467.