Novant: 2007 net income was $204 million
Published 12:00 am Wednesday, December 2, 2009
Novant Health ó the health-care system which recently merged with Rowan Regional Medical Center ó earned $80 million in operating income in 2007.
Novant earned $79 million in 2006, according to a Novant news release.
The funds will be used to begin construction on three new community hospitals ó Brunswick Community Hospital, Forsyth Medical Center-Kernersville and Presbyterian Hospital in the Mint Hill area south of Charlotte.
These new hospitals will be part of $2 billion Novant plans to invest in facilities and medical technologies in the next five years.
In addition to its operating income, Novant earned $86 million for investments, $35 million from the sale of real estate and an affiliated health-care entity and $3 million related to the acquisition of MedQuest Associates.
With the sources combined, the health-care system produced $204 million in net income, or revenues left after expenses, in 2007. This was also up slightly from Novant’s 2006 net income.
“One of our biggest challenges is meeting the increasing demand for patient services and adjusting to our state’s growing population,” said Paul Wiles, Novant Health president and chief executive officer. “For the past five years, we have consistently experienced rapid growth in the number of patients receiving care from our hospitals and physician clinics.
“To meet those challenges, we are expanding our facilities and locating health-care services closer to growing neighborhoods and communities,” he said. “That’s how we invest the majority of our net income, to fund the expansion of our existing hospitals and to develop new facilities to better serve patients.”
Novant’s number of employees was also up in 2007 ó 22,000 as compared to 17,700 in 2006. One of the reasons for that was the addition of Rowan Regional Medical Center and the national MedQuest organization to the health-care system.
Rowan Regional and its board decided in October 2007 to join Novant Health, and the merger became official in January. MedQuest, which joined Novant in November 2007, operates 92 outpatient diagnostic imaging centers in the United States, two-thirds of which are located in the immediate five-state region of the Carolinas, Georgia, Virginia and Tennessee.
Other factors in the staff increase included new hirings to serve a growing number of patients at existing hospitals and outpatient centers and the rapid growth of the Novant Medical Group physician clinics.
Patient visits to Novant facilities and services increased in 2007: emergency room visits by 9 percent; outpatient cases, 7 percent; surgeries, 7 percent; inpatient days, 2 percent; births, 4 percent; and physician clinic visits, 15 percent.
Wiles said the health system’s net income helps fund the financial assistance programs that Novant makes available to uninsured patients. In 2007, Novant hospitals provided care and services to 76,111 uninsured patients, an increase of 8 percent from the previous year.
As a not-for-profit organization, Novant provides charity care and other financial assistance for uninsured patients who do not qualify for government coverage in programs such as Medicare and Medicaid.
Last year, the health system provided approximately $267 million in charity care and other community benefits including uncompensated services for Medicaid and Medicare recipients, community outreach and support of free clinics.
Part of Novant’s 2007 net income also included better than average investment income results, which resulted from a blend of two different trends during the year: a strong market and economy for the first eight months and then a significant drop in the latter part of 2007 felt across the United States and around the world.
Novant also recognized income from two other primary sources:
– $8 million of deferred gain from the sale of several medical office buildings in 2006.
– $27 million from the sale of a reference laboratory.
The health-care system’s growth drives its capital plan, said Dean Swindle, chief financial officer for the system. In addition to the three new hospitals ó all approved by the state ó scheduled for construction this year, Novant plans major renovations for Presbyterian Hospital’s main campus near downtown Charlotte.
“We’re also investing major capital funding in computer and information technology advancements,” Swindle said. “This coming June, the Novant Medical Group physician clinics will begin installing an electronic medical record at six of its locations and then proceed with all 256 other locations over the next two years, and our hospitals have also started the planning process for implementing electronic records.”
Electronic records will greatly speed up retrieval of important patient information, provide physicians and nurses with more decision-making tools, decrease harmful errors caused by handwritten notes and dramatically improve access to medical information from almost any location.
“We’re also one of the first health systems in the nation to invest funds in the Microsoft Amalga system which pulls together patient medical information from multiple sources, such as X-ray, lab, pharmacy and surgery, and presents all of it in one single view for physicians,” Swindle said. “Physicians have to spend too much time gathering information they need to diagnose and treat their patients.”