Expense cuts paying off as Erlanger posts March profit

Expense cuts paying off as Erlanger posts March profit

April 22nd, 2014 by Kate Belz in Local Regional News

Erlanger Medical Center

Photo by Tim Barber /Times Free Press.


Erlanger is currently $4.3 million in the red. At this point last year, the hospital had reported losses of $9.4 million.

• July: $1.5 million profit

• August: $1.5 million loss

• September: $700,000 loss

• October: $183,160 profit

• November: $2.4 million loss

• December: $1.4 million profit

• January: $2.3 million loss

• February: $2.4 million loss

• March: $1.9 million profit


Nine months into the fiscal year, Erlanger has provided more than $64.4 million in uncompensated care, which includes charity care, bad debt and outstanding TennCare costs. $4.6 million of that amount was provided in March.

Source: Erlanger Health System

After two dismal months of heavy losses and a series of cutbacks that included freezing employees' vacation time, Erlanger Health System finally saw some sun in March.

The public hospital reported a $1.9 million profit for the month of March on the heels of $4.7 million in losses over the previous two months.

"It seemed something happened in the last month that really turned things around," trustee Tom Edd Wilson said during a budget and finance committee meeting.

"March has been a much better month for us," explained Britt Tabor, chief financial officer. "We had snow issues in both January and February, and that impact on our outpatient cancellations really killed us."

In addition to improved patient volumes, Tabor said the hospital has also seen results from a series of recent cost-cutting measures, including the decision in February to freeze employee vacation accrual.

That time will soon be restored, CEO Kevin Spiegel said, because of the news earlier this month that the hospital would soon be able to access a new $30 million pool of federal funding

While Spiegel declined to give a timeframe for when the vacation time would be brought back, "it will be soon," he said.

Other savings initiatives, such as new negotiations for the price of drugs, fostering better relationships with ambulance services and outsourcing food services - which took effect in March - are starting to "filter down" into the budget, Tabor said.

Hospital leaders have also been trying to rein in overspending through scheduling, clamping down on the level of staff overtime and how mechanisms like its relief pool and call-back are handled.

The heightened attention to scheduling has been a two-year process that is starting to show fruit, said trustee Jennifer Stanley.

"Even through the stress of the day-to-day, the focus of staying on long-term planning, because that leads to best practices - instead of the knee-jerk reaction month to month," Stanley said.

While hospital leaders said April was not shaping up to be as financially strong as March, Tabor said that there is "more to come" in the savings the hospital would be seeing through other initiatives.

"You're going to need a year's traction with this to better see the impact," Spiegel said.

Contact staff writer Kate Harrison at kharrison@timesfreepress.com or 423-757-6673.