Erlanger Health System reported net income of $6.12 million for the second quarter of its fiscal year, compared to its budget of $4.59 million, largely because it increased patient admissions and earned more money per patient.
Admissions were up 1.4 percent over projections and a whopping 6.4 percent greater than the previous year, Erlanger Chief Financial Officer Britt Tabor told the Budget and Finance Committee of Erlanger's board of trustees at a meeting Monday night.
For the first half of the hospital's fiscal year, net income from operations was $12.5 million, well above the budget of $9 million. That compared to $20 million the previous year. However, Tabor said Erlanger expects to receive reimbursements from the state that will raise that net revenue number to close to $20 million by year's end.
"We're seeing a lot of regional growth," Tabor told the board. "Again, six months into the fiscal year, we're doing well."
On paper, Erlanger charged $624 million for its inpatient and outpatient services for the quarter, which ended December 31. But the actual amount paid for those bills, by individuals, insurance companies and the state and federal government, was much less. The health care system reported revenue deductions of $439 million, including $190 million for Medicare and Medicaid rate adjustments and $195 million for contractual adjustments and rate discounts, generally with insurance companies. Erlanger also reported writing off $27.7 million in bad debt during the quarter, plus another $24 million in charity care.
That left a net operating revenue of $188 million.
During the quarter, Erlanger - Chattanooga's fourth-largest employer with 3,600 employees - paid $99 million in salaries, spent $28 million on supplies, $40 million on services and another $16 million on drugs. All told, expenses were $182 million, leaving a profit of a little under $6 million. That rose to $6.12 million when some miscellaneous items were added in.
Per patient revenue was $8,162, Tabor said, compared to a budgeted $7,452. The hospital reported that on average 469 beds were occupied during the quarter, compared to 421 the previous year. Admissions were 8,855, compared to 8,325 the previous year.
Erlanger currently has about five full-time employees per patient bed, Tabor told the board. While the hospital would like to get below that number, it is unlikely to do so in the next few months because Erlanger will hire about 100 people to work on its $100 million electronic hospital records project.
Erlanger reported cash reserves of $59 million, excluding $105 million in its investment portfolio and another $70 million held by bond trustees. Current accounts payable are $39.6 million, Tabor told the board.
The board also gave the go-ahead for construction of a consolidated outpatient infusion center on the ground floor at Erlanger. That will combine two separate chemotherapy treatment areas at the hospital into one unit and add an extra six treatment chairs, to relieve over-crowding. That brings the total number of treatment chairs to 38.
Contact reporter Steve Johnson at sjohnson@timesfreepress.com, 423-757-6673, on Twitter @stevejohnsonTFP or on Facebook, www.facebook.com/noogahealth.