Stock market portfolio boosts Cone Health to $103 million in excess revenue

Excess revenues over expenses in a nonprofit organization, like Cone, equals profits in a for-profit business. Cone's fiscal year ends Sept. 30.

During the same period in the 2021-22 fiscal year, Cone reported a loss of $179.3 million.

The Greensboro health care system reported Friday that it had $106.3 million in investment income for the fiscal year, compared with a loss of $97.2 million in the same period a year ago.

Nonprofit health care systems, such as Atrium Health, Atrium Health Wake Forest Baptist, Cone Health and Novant Health Inc., rely on investment income to grow their bottom lines.

Excluding the investment income component, Cone earned $17.6 million in core income, down from a loss of $57.7 million a year ago.

Operating income rose 6.1% to $2.71 billion.

That broke down to: 7.71% increase in net patient services revenue to just under $2.4 billion; a 15.1% increase in what it calls “premium” revenue to $198.5 million; and a 27.8% decline in other operating income to $107.6 million.

General expenses increased 3.1% to $2.69 billion.

Salaries and salaries increased 5.8% to $985.1 million. The system's minimum wage was increased on January 31, 2021, from $13 to $15 per hour.

Non-core profits increased 5.3% to $313.3 million, while supplies expenses increased 8.8% to $574.1 million. Cone spent $74.1 million on “purchased (contract) staff,” mostly additional travel nurses, compared to $122.7 million a year ago.

Cone reported a 10.1% increase to 369,452 in emergency department visits systemwide, as well as a 13.9% increase in outpatient visits to 1.22 million, a 27.4% decrease in emergency department visits telehealth to 36,544 and a 3.2% increase in surgical procedures to 41,671.

The report was posted on the Municipal Securities Regulatory Board's website. www.emma.msrb.org. Health care systems' quarterly financial reports are primarily intended for bondholders and rating agencies.

Cone Health has more than 13,000 employees systemwide and five hospitals.

“Like health systems across the country, Cone Health continued to experience financial challenges due to the aftermath of the COVID-19 pandemic, particularly in labor cost inflation and overhead,” Cone said in the presentation. . “At the same time, government payments from the (federal) CARES Act and other sources received during the public health emergency have decreased.

"Management's response to the system's financial challenges included revenue and expense improvement tactics that resulted in significant improvement in operating income from fiscal year 2022 to fiscal year 2023."

Cone provided comments on the potential impact of Medicaid expansion on the system that the North Carolina Department of Health and Human Services will begin implementing on December 1.

Up to 300,000 North Carolinians began being contacted by DHHS on Nov. 6 about their eligibility for Medicaid expansion. Those people are enrolled in the state's limited Medicaid family planning program and are eligible to receive full Medicaid benefits starting Dec. 1.

Medicaid expansion is expected to cover a total of more than 600,000 additional North Carolinians.

DHHS can begin accepting Medicaid expansion applications on December 1 from other eligible North Carolina residents ages 19 to 64. For more information about expanded eligibility, visit https://medicaid.ncdhhs.gov/

For the 300,000 in the limited family planning program, DHHS will communicate via text messages, phone calls and emails, essentially telling those eligible to watch for a letter from their local Department of Social Services.

Cone, as well as other nonprofit health systems in North Carolina, also cited projections of receiving funding from the Hospital Access and Stabilization Program.

The program provides acute care hospitals with increased reimbursements for Medicaid patients that are funded through hospital assessments and federal matching funds. HASP's initial payment is expected to be received in the first quarter of its 2023-24 fiscal year.

"In addition, changes to the certificate of need regulation will reduce requirements by two to three years for certain clinical services," Cone said.

Senate Leader Phil Berger, R-Rockingham, said that, citing his support for additional CON reforms, the availability in 2022 of the Health Care Access and Stabilization Program (HASP) is a key element in the search for the expansion.

According to the NC Healthcare Association, HASP would allow “North Carolina hospitals and health systems the opportunity to receive up to $1.8 billion in federal dollars to improve access to care for Medicaid patients.”

Hospital assessments have been a sticking point in negotiations for the past nine years, even though the state's major health care systems have embraced the assessments with the expectation that additional federal administrative funding from Medicaid will more than offset the expense. annual.