Topics
More on Budgeting

Public Erlanger Health System posts record profit in stark turnaround

Chattanooga, Tennessee-based system had posted losses in 10 out of its last 15 quarters.

"There is no question we have achieved this by focusing on two key areas: top line growth and bottom line cost management.""There is no question we have achieved this by focusing on two key areas: top line growth and bottom line cost management."

Chattanooga, Tennessee-based Erlanger Health System on Tuesday said it earned a record $12.7 million profit in its fiscal second quarter, its highest in 30 years and its first profit after posting consecutive losses in the past three years. Erlanger has posted losses 10 times in the past 15 quarters.

The county-run hospital said it has earned $20.4 million in its fiscal year to date.

"There is no question we have achieved this by focusing on two key areas: top line growth and bottom line cost management," Chief Financial Officer Britt Tabor said in a statement. "The numbers for our second quarter clearly demonstrate the upward trend with growth in volumes and sustained positive financial performance at Erlanger."

Tabor added that the system managed to post its largest profit while still providing more than $43 million in uncompensated care in its first two quarters.

When it came to patient volumes, Tabor said admissions for the quarter were more than 10 percent higher than budgeted. Erlanger also managed to record 94 days with cash on hand.

"This is the direct result of a continued focus on operating efficiencies, physician relations, top-line growth and our cash collections," Tabor said.

"There is no question we have achieved this by focusing on two key areas: top line growth and bottom line cost management."

Follow Healthcare Finance on Twitter and LinkedIn.

According to WRCBTV in Chattanooga, Erlanger presented the results to doctors, nurses and other staff at a packed meeting of the Chattanooga-Hamilton County Hospital Authority's budget and finance committee.

The stark turnaround comes as the public hospital faced criticism for voting on executive bonuses in a recent closed door meeting, something state law allows it to do. Lawmakers have since filed bills to open up that process.
Erlanger said just about every metric it tracked showed improvement, and attributed the success to an across-the-board focus on efficiency.

For example, the hospital saw surgical inpatient volume jump nearly 9 percent in the year, while emergency room visits grew by 10 percent. At the same time, costs per admission fell to $7,530 from its budgeted $7,758.

"Erlanger's orthopedic inpatient surgeries were 15.3 percent over budget and almost 33 percent greater than last year, and our neurosurgery inpatient surgeries were 25 percent higher and more than 17 percent over budget," Tabor added.

Erlanger said its aggressive strategies also caught the eye of investors. The health system has picked up $71 million from bond sales, which it used to help fund an expansion.

Twitter: @HenryPowderly

Show All Comments