“This year's kind of an anomaly, but right now sitting at a loss from operations of 10%,” Chief Financial Officer for Phelps Health Jana Cook said when she updated Phelps Health’s Finance Committee on the impact of COVID-19 on the health system’s finances in August.
Cook said Phelps Health had its second busiest month in August since the organization started to postpone elective surgeries and implement visitor restrictions to brace for a potential onslaught of coronavirus patients in March.
However, August's net operating revenue and operating expenses were still below budget as the organization works to gradually increase patient volume, according to Cook at the Committee’s September meeting.
Overall, patient volume at Phelps Health was under the budgeted amount for August by 7.5%. Cook said, inpatient volume was under budget by about 8% and outpatient visits were under budget by about 7.3% in August.
Compared to budgeted amounts for August, Emergency Department visits were down by 7.2%, Phelps Health Medical Group clinic visits were down by 20%, surgeries were down by 25% and Waynesville Medical Plaza clinic visits were down by 45.6%.
Cook said total operating revenues were down by 6.3%, and operating expenses were down by 6.1% compared to budgeted amounts for August. Cook said Phelps Health had a loss from operations of $138,000 during August.
“This is a month that we had budgeted a loss from operations for what we thought would be impacted with the Epic electronic health record system. We had additional Epic expenses budgeted primarily in training that began during the month of August for our employees,” Cook said.
Cook said Phelps Health had an operating margin of negative 0.6% when the organization was budgeted to be at negative 0.3% for August.
Year-to-date, Cook said Phelps Health reported a loss from operations of $16.6 million, which was under the budgeted amount by $19.5 million. For the first eight months of the fiscal year, Phelps Health’s operating margin was a loss at negative 10% compared to a budget of 1.5%.
“We’ve added back in our non-operating revenues $17.9 million. Of that, about $13.8 million in stimulus funds that we’ve received. The remainder of that would be a gain in our investment portfolio,” Cook said.
Phelps Health’s income from non-operating revenue for August was $4.8 million, which was over budget by $4.1 million due to favorable market conditions for investments as well as stimulus funds received from the Department of Health and Human Services, Cook said.
Phelps Health's total cash and investments were $200 million as of Aug. 31, an increase of $39.8 million from Dec. 31, 2019, which Cook attributed to accelerated payments the organization received through the Medicare program and stimulus payments the organization received from Health and Human Services.
Phelps Health's total debt was $72.6 million as of Aug. 31, an increase of $8.5 million from Dec. 31, 2019. Cook said Phelps Health’s total uncompensated care on the year was $34 million.
After Cook provided an overview of the organization’s financials, Phelps Health CEO Ed Clayton updated Phelps Health’s Board of Trustees on the organization’s general operations.
Clayton said Phelps Health continues to test more people for COVID-19, and the two-week rolling average of positive COVID-19 tests performed at Phelps Health was 11.6% as of Wednesday, Sept 23.
“Because we continue to see community spread of COVID-19, we want to make sure we provide a safe environment for our patients to receive care at Phelps Health,” Clayton said.
Phelps Health employees and patients are required to wear masks while in all Phelps Health locations, and visitor restrictions continue to be in place.
Currently, no visitors are allowed at Phelps Health Hospital or clinics with a few exceptions that apply to — intensive care unit patients, patients under 18 years old, obstetrics labor and delivery patients, intellectually disabled patients and prisoners.
Residents can learn more about Phelps Health’s current visitor policies at https://phelpshealth.org/patients-visitors/visitor-information.
“We look forward to the day when we can loosen these requirements, but currently, we must follow the masking requirements as they are a necessity to help slow the spread of COVID-19,” Clayton said.