• Financial Report

    In spite of continuing challenges created by a national climate of healthcare reform and regional responses, Wellmont maintained its financial strength in fiscal 2013. Among these challenges are the federal sequestration and other reductions in Medicare, reduced inpatient utilization from the implementation of new outpatient-oriented care models and the continuing general shift by Medicare and other payers from the use of inpatient services to observation or outpatient care. 

    While inpatient volumes declined 5.8 percent from fiscal 2012, observation patient volumes increased 0.5 percent. Other hospital volumes were mixed, with emergency room visits down 6.7 percent. Wellmont's three urgent care centers present a more cost-effective and patient-friendly alternative. Other outpatient volume was up 0.5 percent, though surgeries were down 2.6 percent. 

    As a result of new obstetricians in our area, newborn deliveries increased 14.3 percent. And due to the ongoing development of Wellmont Medical Associates, the Wellmont CVA Heart Institute and the Wellmont Cancer Institute, physician office visits increased 17.2 percent.

    These activities, as noted above, resulted in a net revenue increase of $9.8 million from fiscal 2012.

    Salaries and benefits increased $12.9 million from fiscal 2012, primarily driven by physician practice growth and an increase in healthcare benefit costs due to increasing enrollment. Hospital productivity remained flat as compared to fiscal 2012. Depreciation increased $5 million, primarily for information systems necessary to achieve Meaningful Use (the federal Electronic Health Record Incentive Program).

    All other expenses increased $1.5 million for a total expense increase of $19.4 million. Therefore, income from operations of $12.9 million was lower than fiscal 2012's $19.1 million.

    Non-operating gains increased $2.7 million from fiscal 2012, primarily from strong investment performance. Discontinued operations losses and non-controlling interest allocations increased $1.7 million, due largely to the closure of certain sleep lab operations. Therefore, net income (revenue and gains in excess of expenses and losses) of $31.4 million was strong but lower than fiscal 2012's $39.8 million.

    Days cash on hand increased as a result of strong investment performance, receipt of federal and state Meaningful Use funds and borrowings associated with the Epic implementation. The debt-to-capitalization ratio improved slightly due to our borrowing discipline. The debt-service coverage ratio dropped slightly due to the net borrowings. 

    Audited Financials

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