Optimistic about Erlanger Health System’s ability to turn even more profits after several record-breaking months, the hospital’s budget and finance committee signed off on the hospital’s 2016 budget Monday.
Budget highlights
* Total patient revenue: $2.4 billion* Net patient revenue: $713 million — 9.5 percent increase* Total operating revenue: $744 million* Total expenses: $715 million* Excess revenues over expenses from operations: $29.4 million* Excess revenues over expenses: $18.7 million* 3 percent market adjustment raise for employeesSource: Erlanger Health System
Britt Tabor is the chief financial officer for the Erlanger board of trustees.Read more
Erlanger East moves forward with $51 million expansion
The budget is aiming for a $18.7 million bottom line in the coming year – $8 million more than the last budget. That factors in a projected 8.9 percent increase in admissions. Officials say they hope to build on a turnaround year after three years of losses before 2014.
“This budget is an aggressive budget, but we believe it is obtainable,” Chief Financial Officer Britt Tabor said.
The budget also includes a 3 percent raise for all employees except a subset of nurses, who will receive the second phase of a $5 million market adjustment to bring their pay up.
The hospital is putting about $30 million toward its capital budget – $13 million of which will go toward the hospital’s new $91 million IT program. Other large projects include two additional orthopedic operating rooms, interventional radiology lab replacement, cancer center infusion consolidation and expansion of its ICU.
The budget includes $18.5 million of federal public hospital funding, which the hospital acquired for the first time last year. But about $8 million from another federal pool, called disproportionate share funding, was not included. Erlanger officials said the status of that funding is unclear given Tennessee’s current relationship with the federal government after not expanding Medicaid.
Health advocates in the state have been warning of financial turmoil at hospitals after Tennessee lawmakers’ decided earlier this year not to expand the program, which would have allowed 280,000 uninsured people to have access to TennCare health coverage just as federal payment cuts are slated to increase.
For Erlanger, that looks like $9.2 million in payment reductions, officials said.
Meanwhile, officials say they are closely watching the Supreme Court’s decision on King vs. Burwell, which challenges the legality of the subsidies that hundreds of thousands of people in Tennessee and Georgia depend on to afford insurance through HealthCare.gov.
Also included in next year’s budget is a 5 percent charge increase, which Tabor said applies to self-pay patients, who already receive heavily-discounted rates.
In other business Monday, the hospital committee approved putting $3 million toward new angiography lab equipment, and $676,000 on security firewall upgrades. Those items, including the budget, will be voted on by the full hospital board Thursday.
Contact staff writer Kate Belz at kbelz@times freepress.com or 423-757-6673.