Erlanger Health System reported second quarter earnings that were below budget Monday evening.
Chief Financial Officer Britt Tabor told the budget and finance committee of the hospital's board of trustees that net income from operations for the second quarter was $1,041,375, below the budget target of $3,035,807.
During the quarter, Erlanger Health System had a net loss of $1,664,000, compared to a budgeted net income of $487,000.
However, net income before interest, taxes, depreciation and amortization (EBITDA) was $21.8 million, only slightly below the budgeted target of $21.9 million.
Erlanger CEO Kevin Spiegel said he was pleased with the results, noting that admissions were up, as were revenues per patient.
"Last year was a really good year, and the year before that was a really good year," he said. "But year-to-date, our net patient revenue is up 10 percent from the prior year."
Tabor said the hospital missed its budget targets for overtime pay, and also had higher than expected employee health benefit payouts during the quarter. He also blamed higher-than-expected expenses for drugs for a portion of the loss.
Erlanger self-finances its employee health insurance and paid out $600,000 more in benefits than predicted, Tabor said. Thus far, figures for January don't show that trend continuing, he told the board.
Spiegel noted that Erlanger also is amortizing $100 million in debt from its EPIC computerized hospital records program. He said part of the extra overtime expense is beacuse of employees being shifted to the EPIC project for a few months, requiring replacements to be hired.
Tabor said the hospital has written off $47 million for bad debts and charity care and predicted that figure could top $100 million by the end of the year.
Board member Dr. Woody Kennedy, a plastic surgeon who is not employed by Erlanger, noted that one reason that the hospital charity care payments were rising was that many patients had health insurance with high deductibles. Whereas in the past, patients with a deductible of $2,000 would be able to make that payment, he said, that has become more difficult as deductibles have risen to $5,000 or higher.
The budget and finance committee also approved Erlanger's proposal to expand and relocate its pharmacy.
The only objection came from Kennedy, who noted that the new facility will take away more than two dozen parking spaces currently used by physicians. Erlanger COO Rob Brooks assured him that the hospital will try to identify staffers who are non-doctors who are currently using that parking lot and insist that they park elsewhere.
Contact staff writer Steve Johnson at 423-757-6673, sjohnson@times freepress.com, on Twitter @stevejohnsonTFP, and on Facebook, www.face book.com/noogahealth.