Novant reports net income of $273 million, gives away $129 million in free care
WINSTON-SALEM — Novant Health, which owns Rowan Medical Center in Salisbury, has announced audited financial results for the not-for-profit healthcare system.
For 2013, the system reported a net income of $273 million on operating revenue of $3.6 billion. The system also reported a community benefit of $566 million, including $129 million of direct charity care, according to a news release.
Fiscal year 2013 net income, also referred to as excess of revenue over expense, is comprised of $110 million of operating income and investment gain of $163 million.
Carl S. Armato, president and CEO of Novant Health, said the organization remained vigilant in 2013 to control costs in a turbulent environment.
“As we continue to operate in a challenging market, I am proud of Novant Health’s ability to remain nimble and control costs while keeping the focus on delivering the best care to our patients,” Armato said. “Strong financial results are necessary for us to reinvest in our communities, facilities and employees. A strong organization ensures our future ability to provide needed services.”
Novant provided more than $566 million of community benefit including more than $129 million in charity, or free, care to uninsured and indigent patients in 2013. As a not-for-profit healthcare system, the organization is committed to fulfilling its mission to improve the health of communities — regardless of a patient’s ability to pay, according to the statement.
In 2013, Novant provided services ranging from education to full disease treatment to indigent and uninsured patients at no cost to them. The organization served more than 130,500 individuals through community health service offerings (health education, screenings, support groups), professional education and other community outreach activities/investments focused on improving the health of communities.
Additionally, Novant provided free cancer education to 16,283 persons and cardiovascular screening to more than 13,000 identified at-risk patients.
Charity care for indigent patients ranged from providing flu shots to comprehensive cancer treatment.
In addition to community benefit and charity care, as a not-for-profit system, the organization reinvests operating and investment income into new technology, hospital improvements, equipment and community health needs.
In 2013, Novant leaders noted that significant milestones for key investments were reached. Novant physician clinics completed the roll-out of the electronic health record at all clinics three years early and under the projected budget.
The project is part of the $600 million investment the organization expects to make implementing the electronic health record across all facilities. Additionally, the first of the system’s medical centers made the transition to the electronic health record in October 2013. Novant Health Presbyterian Medical Center completed the transition with no significant disruption to operations.
In all, the organization invested more than $350 million in capital for construction projects, routine equipment replacements at facilities and the implementation of the electronic health record.
Fred Hargett, CFO for Novant Health, said this investment was made possible by healthy financial results.
“Strong years such as 2013 allow for continued investment in our communities, facilities and state-of-the-art treatment equipment,” Hargett said. “We have a responsibility to our patients to provide them with the very best care available. A large part of that is ongoing investment in the tools needed to provide the highest degree of care.”
Since 2010, Novant has focused on clinical transformation to gain efficiency, lower costs and, most importantly, return nurses to the bedside of patients. As a result of the changes, the organization has recorded a 32 percent decrease in patient falls across all hospitals and a 17 percent reduction in reported medication error rate. Medication overrides — a precursor to medication errors — have also declined.
With nearly 60 percent of Novant patients covered under Medicare or Medicaid, continued revenue challenges are expected in the future as reimbursement cuts are made at the state and federal levels. The organization continues to monitor changes and find solutions to offset cuts in reimbursement, according to the release.
Work in population health management and ongoing efforts to manage costs are expected for the foreseeable future, Novant said.
“As we face continued cuts, Novant Health will work to find efficiency in our operations and provide more transparency to patients related to their financial responsibility,” Hargett said. “We support transparency as a cornerstone in guiding healthcare choices and look forward to proactively providing greater clarity around pricing to our patients and consumers.”