WellStar reports an $86M bottom line
by Kim Isaza
newseditor@mdjonline.com
December 15, 2012 12:30 AM | 3351 views | 1 1 comments | 17 17 recommendations | email to a friend | print
MARIETTA — WellStar Health System reported a fiscal 2012 bottom line of $86 million, less than half of the $178 million “savings for reinvestment” recorded in 2011 — though last year’s figures were aided significantly by high investment returns.

Executives say fiscal 2012, which ended June 30, was a good year for the nonprofit health system.

“We’ve been able to produce four consistent years of delivering high-quality care and consistent earnings critical to our five-year capital investment plan,” CEO Reynold Jennings said.

In audited financials, the Marietta-based system reported operating revenue of $1.46 billion in 2012, and operating expenses of $1.37 billion, leaving net operating income of $97 million. But the system lost $11 million in its investments this year, leaving a bottom line of $86 million.

By contrast, in 2011, the system reported operating income of $1.37 billion and operating expenses of $1.27 billion, leaving net operating income of $99 million that year. Although the system reported losing $3 million in fiscal 2011 from an unusual winter storm, it earned a stunning $83 million on its investments that year, for an overall bottom line of $178 million.

Jim Budzinski is WellStar’s chief financial officer.

“We are a nonprofit, and every dollar we save, we reinvest in our community,” Budzinski said. “We also need to ensure that we’re being good stewards of the community assets, that we’re not only providing high-quality care, but doing it cost-effectively. Today, our cost per unit of service, when adjusted for acuity, is less than it was in 2008.”

The cost of unreimbursed care provided by WellStar continued to increase. In 2012, it totaled $231 million, up from $203 million in 2011.

That includes treatment of people without insurance, charity care, Medicaid and Medicare losses, as well as community programs that provide free screenings and free clinics.

WellStar has 12,628 employees.

In fiscal 2012, WellStar completed three major capital projects, including the Kennestone Outpatient Pavilion, the Hospice at Kennesaw Mountain and adding 10 operating-room suites at Cobb Hospital.

So far in fiscal 2013, the system has opened its Acworth Health Park, and next month expects to reopen the blue tower west at Kennestone Hospital, converting semi-private rooms to private rooms.

In March, the system expects to break ground on the East Cobb Health Park, which is scheduled to open in 2014. WellStar is also planning to expand the intensive-care unit at Douglas Hospital this year, and has applied for a certificate of need from the state for a $10 million pediatric diagnostic center on Barrett Parkway near Cobb Parkway in Kennesaw.

A replacement for Paulding Hospital is under construction and slated to open in spring 2014.

The health system continued buying doctor practices in 2012 and now has 545 doctors and practitioners such as physician assistants and certified nurse practitioners in WellStar Medical Group.

Jennings said there is an “active pipeline” of doctors interested in joining WellStar, which he expects to continue for at least four more years.

“Given the uncertainties of the federal health care law, many doctors believe they need help with office structures and they just want to practice medicine. It’s predicted nationally that within three years, 65 percent to 70 percent of all physicians will seek employment by large health care systems,” Jennings said.

WellStar recorded 318,000 visits to its emergency rooms in fiscal 2012, more than it had anticipated.

There were 1.3 million visits to its medical group doctors in 2012. That was up slightly from the year before.

For fiscal 2013, WellStar anticipates revenues of $1.6 billion, expenses of $1.5 billion and a bottom line of $97.5 million. Figures for the first quarter, which ended Sept. 30, show the system is well on its way to that goal, with a bottom line of $44 million on revenues of $530 million and expenses of $487 million.

Budzinski said the system is seriously concerned about the fiscal cliff facing the nation, as well as possible cuts in Medicaid that could come as the General Assembly session gets underway next month.

“The fiscal cliff and sequestration certainly concerns us,” Budzinski said. “It that occurs, it would mean an $8 million reduction in reimbursements for WellStar. … And as one of the state’s largest Medicaid providers, we worry about cuts there.”

Jennings added that new federal health insurance mandates may cover more people, though many of those will be pushed into high-deductible policies.

“For a lot of those, family income is not sufficient to pay those copays and higher deductibles at the time of service,” Jennings said. “More insurance is not going to solve that tension.”
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December 15, 2012
So Wellstar is given a monopoly on Cobb County's healthcare and they overcharge Cobb Countians by millions of dollars. That is real nice.
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