Phelps Health concluded the first quarter of 2019 with a growth in total operating revenues of 3.6 percent over the first quarter of 2018, Vice President and Chief Financial Officer for Phelps Health, Jana Cook said, and the finance committee made a motion to approve a request for the Board of Trustees to allow the administration to seek requests for proposals for the issuance of $20 million in bonds.
Year-to-date, ending on March 31, 2019, Phelps Health had total operating revenues of $66 million — over budget by $400,000, Cook said at the April 24 Finance Committee meeting.
Total operating expenses year-to-date of $64.2 million was 4.3 percent over the operating expenses in 2018.
“Again we are running over budget in expenses by 2 percent,” Cook said. Purchased services, employee benefits and supply expenses were the three areas that were attributed to expenses over budget from the first quarter of 2018.
For March, Phelps Health had $272,000 in income from operations, which was under budget by $799,000. Year-to-date, income from operations of $1.8 million was under budget by $867,000, according to Cook, and through March, income from operations as a percentage of net operating revenues was 2.8 percent compared to a budget of 4.1 percent.
Through March, Phelps Health had a net income of $1.6 million, which was under budget by $40,000. While, year-to-date, a net income of $9.5 million was over budget by 4.6 million, and through March net income as a percentage of total revenues was 12.9 percent compared to a budget of 7.1 percent.
A high patient average daily census of 95 patient days, Cook said contributed to the March net operating revenue of $22.8 million over budget by $121,000 or 0.5 percent.
Operating expenses in March totaled $22.5 million, and expenses were over budget by 4.3 percent at $921,000. Cook said expenses for the organization were over budget due to supplies and purchased services, with purchased service expense over budget by $536,000 related to the use of agency personnel.
In addition, supplies expense was over budget by $292,000 in March because of the expense of pharmaceuticals in the employee and Delbert Day Cancer Institute pharmacies, Cook said. Another factor was the volume and case mix in the cardiac catheterization lab resulting in operating expenses over budget, according to Cook.
Phelps Health had non-operating revenues of $1.4 million in March, which was over budget by $759,000 due to positive market conditions, and total cash and investments were $150.8 million as of March 31, 2019 – an increase of $9.9 million from Dec. 31, 2018.
Phelps Health ended March 31, 2019 with total debt at $59.7 million – a decrease of 1.2 million from Dec. 31, 2018.
The Phelps Health Finance Committee made a motion to approve the request for the Board of Trustees to allow administration to seek requests for proposals to issue approximately $20 million in bonds for Phelps Health.
Cook said the reason behind the request was to offset payments for the new Epic Systems Corp. medical record system that Phelps Health plans to purchase and implement over the next 18 to 24 months.
Phelps Health President and CEO Ed Clayton noted that the cost of borrowing is at historically low levels. Clayton said, “Given the size and scope of this project, issuing bonds makes sense.”
The Board approved the bond issuance, and now the Phelps County Commission has to sign off for the final approval.