Erlanger Health System bounces back in second quarter

Erlanger Health System bounces back in second quarter

January 23rd, 2019 by Elizabeth Fite in Local Regional News

Staff photo by Jenna Walker/Chattanooga Times Free Press - Mar 3, 2011 -- Building mug of Erlanger Hosptial in Chattanooga, Tenn.

Photo by Jenna Walker /Times Free Press.

Erlanger Health System regained some early fiscal year 2019 losses to finish the second quarter — which ended Dec. 31, 2018 — slightly above even at a year-to-date operating income of about $122,000.

The hospital's second quarter operating income was higher than budgeted and $3.3 million more than during the same period last year, but not enough to reach its midpoint budget goals. Combining results from the first two quarters, Erlanger sits about $1.4 million short of its budgeted operating income and 9.6 percent below budget for admissions.

"Although we're not making our budget goals, we are exceeding prior years during the quarter," Erlanger CFO Britt Tabor said during a Budget and Finance Committee meeting on Monday.

Britt Tabor is the chief financial advisor for the Erlanger board of trustees.

Britt Tabor is the chief financial advisor for...

Photo by Jay Bailey /Times Free Press.

Tabor presented the latest financial report to board members on the committee and said that he expects improvement in the coming months as Erlanger addresses "cost management issues." He expects Erlanger to still meet or exceed its budget by June 30, but some non-essential capital investments will likely be rolled over into next fiscal year, he said.

To lower expenses, areas of focus include managing reimbursement changes and reducing average "length of stay" — an issue that has come up in previous meetings — by moving patients through the hospital more efficiently.

He also said that Erlanger's volumes continue to grow over the prior year and the health system hit a "new milestone" by reaching 43 percent market share in Hamilton County based on new data from the Tennessee Hospital Association.

"That is the highest that Erlanger has been in market share in the primary service area," Tabor said.

Matt Gibson, Erlanger's chief strategy officer, said the growth in market share is "really important for our trajectory."

"As we've seen for years all over the country, including in Tennessee, there's less and less inpatient business and more outpatient," Gibson said. "Erlanger is gaining more of a significant percentage of that shrinking inpatient pie."

Another high note for Erlanger was a larger share of commercial insurance utilization — which pays the hospital more than Medicare and Medicaid — than expected for the quarter.

Don Mueller, CEO of Children's Hospital at Erlanger, reported on the status of the Neonatal Intensive Care Unit since a new neonatology team started in December.

Despite a low NICU census in December, he said he's "very happy with the way that transition's going," that the lower numbers are part of a downturn throughout the region, and the census is returning to normal.

"This happens at times in pediatrics. It doesn't necessarily bother me," Mueller said. "The positive side of something like this is we were experiencing nurse burnout, having nurses work extra shifts, paying a lot of overtime — so during this time period we've done a good job of calling those nurses off and actually getting them some rest."

The full board will meet during an open session Thursday, Jan. 24, at 5:15 p.m. in the Erlanger board room. Board members will vote on a resolution to amend a prior resolution regarding the outsourcing of the Central Sterile Department.

Contact staff writer Elizabeth Fite at efite@timesfreepress.com or 423-757-6673.


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