“This was a very good year for the organization, total operating revenues of $255.8 million, a growth of 5 percent over 2017,” said Jana Cook, Chief Financial Officer of Phelps Health.

Phelps Health picked up additional net patient service revenue of $1.8 million in Fiscal Year 2018, and the organization was behind budget in other operating revenues; a variance of $2.2 million for the year.

Total operating expenses were at $247.7 million for the medical center in 2018, and were under budget by $3.4 million, Cook said at the Jan. 23 meeting.

“The big variance in the operating expenses between 2018, were salary and wages under budget by $2.5 million, primarily offset by this amount in purchased services being over budget by $2.6 million, that reflects about the 47 agency FTEs we have in-house,” Cook said.

Employee benefits expenses finished under budget by $4.5 million in 2018, related to change associated with the brand, and also with the use of agency personnel, Cook said.

Total supply expenses were up 4.5 percent in 2018, mostly due to the growth the organization had in purchased services, Cook said. Total operating expenses were under budget by $3.4 million, and income from operations were over budget by $3 million in 2018.

“We did post a loss in investments on the year of $1.1 million, total excess of revenues over expenses at $7 million with a total margin of 2.7 percent,” Cook said.

Over the last 12 months, the organization was able to grow cash and investments to about $140.5 million, an increase of nearly $9 million during 2018. 

“Our patient accounts receivable grew by about $300,000 and ended the year at $34 million, a 1 percent growth from 2017,” Cook added. “Overall looking at our liabilities the main thing to talk about is our debt, we ended the year at $60.9 million in total debt, and we paid down $4.7 million in principle.”

Phelps Health’s employee net position grew by $7 million over the year, with the total net position currently at $227.6 million.

“Looking at our operating income of $8.1 million, which is again very similar to where we finished 2017 divided by our total operating revenues of $255.8 million, we finished the year with a 3.2 percent operating margin,” Cook said.

Total FTEs in the organization in 2018, were just shy of 1,600 with 1,144 FTEs in the hospital and 47 FTEs used in agency personnel. There were 345 FTEs in the clinics and 60 FTEs in Home Health.

“That is about a 37 FTE growth that we had during 2018, just shy of about 2.5 percent,” Cook said.

The organization finished 2018 with daily expenses of about $631,000.  Cook said, “We could go 223 days in theory without any money coming into the door and without having to adjust our operations. That is again well above the benchmark that is 164 days.”

The organization finished 2018 with $56 million in uncompensated care provided to the community.

“The last thing to look at is our overall investment allocation in comparison to our investment policy; fixed income is a little bit over the policy parameters, and equities are under the policy. That is because we just changed the policy at the end of the year, and we also saw the loss in December which kind of swung it,” said Cook.

Income from operations was $520,000 for December 2018, which was over budget by $98,000. Income from operations as a percentage of net operating revenues was 3.2 percent compared to a budget of 2 percent. 

Net loss for December was $2.8 million and was under budget by $3.6 million. Through December, net income as a percentage of total revenues was 2.7 percent compared to a budget of 3.6 percent, Cook said.

The December net operating revenue of $21.5 million was under budget by $364,000. Cook said, the variance in net patient service revenue could be attributed to other operating revenue of $582,000, below budget by $379,000 —this was primarily related to employee pharmacy revenue.

Operating expenses for December of $20.9 million were under budget by $461,000.  The variance in operating expenses, Cook said, can be attributed to salary and benefit expense under budget by $995,000 related to a decrease in expected health insurance expense and the holidays.

Cook added, purchased service expense was over budget by $463,000 related to the use of agency personnel.

Non-operating revenues in December came in under budget by $3.6 million due to market fluctuations effecting investments, Cook said.