Erlanger reports solid earnings for third quarter

Erlanger reports solid earnings for third quarter

April 25th, 2017 by Steve Johnson in Business Around the Region

Erlanger Health System reported solid third quarter financial performance, with net income from operations of $8.4 million, better than a budget of $7.2 million.

The hospital system boosted admissions by 12.4 percent compared to the prior year and reported total income before interest, taxes, depreciation and amortization (EBITDA) of $34,771,475.

"Erlanger East is exceeding all expectations, our heart surgeries are up 61 percent, greater than the prior year — it was an exceptional third quarter, " Erlanger CEO Kevin Spiegel told members of the hospital's budget and finance committee Monday evening.

Erlanger East's opening in December added 79 more beds and four more operating rooms to the overall Erlanger system, which boosted income and admissions. "Erlanger East exceeded expectations by virtually tripling prior year volumes," Erlanger Chief Financial Officer Britt Tabor said in a statement for the board.

But Erlanger officials also said they have been successful in taking market share away from their primary competitor in the area, CHI Memorial. Joe Winick, Erlanger's senior vice president for planning and business development, displayed a chart that showed while Erlanger and CHI Memorial had been tied for market share of about 37 percent as of 2012, Erlanger now leads by 42 percent to 32 percent.

Erlanger officials also touted their success in controlling costs while growing revenue. "Our salary cost per hour was $33.87, compared to a budget of $33.98," Tabor said. "Our supply costs per adjusted admission was $1,480 compared to a budget of $1,490."

Tabor had worried in a previous board presentation that bad debts might increase, but said that had not happened thus far. "Bad debt and charity care is still under 8 percent, so there were no red flags there," he said.

The one caution Spiegel and Tabor gave to the board was over the launch of the hospital system's new $100 million electronic medical records system, called EPIC, which will start rolling out May 1. The hospital has budgeted for lower revenues because of a loss of productivity for several weeks or months until doctors and staff figure out the new software. "People will be learning a new system, so it will be lower," Spiegel said. "That has happened at every hospital that ever goes live on electronic medical records."

Contact staff writer Steve Johnson at 423-757-6673, sjohnson@timesfreepress.com, on Twitter @stevejohnsonTFP, and on Facebook, www.face book.com/noogahealth.


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