Erlanger budget committee members heard good news at the committee’s monthly meeting Monday night, as the hospital brought in a profit of $1.5 million in March.
Officials attributed the gain largely to an increase in admissions, more inpatient surgeries that bring higher reimbursement payments, the pay-off from cost-containment efforts that reduced drug and supply costs and keeping labor expenses in check.
Committee members also were briefed on how officials will craft the hospital’s budget for the upcoming fiscal year, which will begin July 1. The committee will vote in June on the proposed budget, which officials said will be based on both statistical projections of growth in the medical industry and the expected effects of the hospital’s strategic plan.
Health care utilization in Erlanger’s primary market area is expected to grow only 7.4 percent over the next decade, or just 0.74 percent per year, said Joe Winick, senior vice president of strategic planning. That projection — from health care consulting firm Sg2 — takes into account an aging and sick population but also improvements in care and technology that could constrain utilization, he said. It also considers pressure from payers such as Medicare to control utilization, as by cutting down on repeat admissions from chronically ill patients, he said.
Budget committee chairman Donnie Hutcherson noted after the presentation that he hopes the hospital can reach the goals set out in the budget.
“We’ve missed budget for the last couple years. If I can give any counsel it would be, be conservative in the baseline … because it would be nice to have a more conservative budget and hit budget this year,” he said.
Committee members also were briefed on some major capital expenses planned for next year, including $1.4 million for the purchase of the hospital’s second da Vinci Surgical System for robotic surgeries and $2.1 million on an advanced MRI scanning machine.
The board also gave preliminary approval to a resolution to buy the Chattanooga Lifestyle Center building on Market Street. Erlanger now is on a lease-to-own plan with Lifestyle Center LLC, but by refinancing and assuming the facility’s $5.1 million mortgage and paying $1.7 million to the LLC Erlanger would end up ultimately saving $1.1 million, officials said.
The resolution will be discussed at Thursday night’s board meeting.
RESOLUTIONS PASSED
The budget and finance committee passed the following resolutions, among others, which will be considered by the full board of trustees on Thursday:
* Renovate a suite in the medical mall for a new adult cardiology physician practice; $1.1 million.
* Renovate space at the Plaza Ambulatory Care Center for ophthalmologist Paula Nicola to lease space there; $142,207.
* Modernization of three non-public elevators installed in 1938; $487,200.
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