Local & State Headlines

Phoebe reveals finance report

• Profits and expenses at Albany's community hospital rise for the fiscal year ended July 31, 2007.

Barbara Rivera Holmes

ALBANY — Phoebe Putney Memorial Hospital’s 2007 fiscal year audit shows the hospital’s income grew by more than $5 million, an increase that hospital officials said allowed for a reinvestment of $31.2 million in equipment and property.

Net revenue rose from $439.9 million in fiscal year 2006 to $487.7 million in fiscal ’07.

Phoebe CEO Joel Wernick said he was satisfied with the growth.

“If the hospital is not financially secure, then the mission is at stake,” said Wernick, who cited the financial debacle at Fulton County’s Grady Hospital as an example.

Phoebe’s excess revenues over expenses for the year ending July 31, 2007, were $17.6 million, according to the audit presented Wednesday. That’s an increase of $5.3 million over fiscal year 2006 figures of $12.4 million.

“I’d rather it be bigger,” said Phoebe CFO Kerry Loudermilk, who attributed the fiscal growth to cost-saving initiatives, more services and increased patient volume. Still, “We are satisfied and comfortable with that (growth).”

Some of the volume growth, particularly about 750 cases in obstetrics, said Wernick, can be attributed to the March 2007 tornado that destroyed Sumter Regional Hospital in nearby Americus.

Phoebe’s profit growth of 3.6 percent is still below the national average (for hospitals with more than 400 beds) of 5 percent, and well below the AA bond rating average of 7.2 percent.

“The AA (growth) is our target,” Loudermilk said after the hospital’s 11 a.m. finance committee meeting, during which the audit was approved.

In 2006, the total margin of profits from operations and nonoperations was 2.8 percent, compared with 2.7 percent in FY 2005, 1.9 percent in FY 2004 and 5.4 percent in FY 2003, according to data presented by auditor Bert Bennett, a partner in Albany accounting firm Draffin and Tucker.

Wernick said the fact that prices didn’t go up accounts for the drop in revenue growth from fiscal year 2003 to fiscal year 2004 — from $20.2 million to $7 million, respectively.

The annual revenue growth puts the hospital in a position to expand the services it can offer area residents, Loudermilk and Wernick said.

“If you look at what happens to that, all that money is reinvested,” Loudermilk said. “The $31 million of investments in new equipment and services ... all that goes back to meeting the needs of the patients of ... Dougherty County and Southwest Georgia.”

New equipment and services unveiled in calendar year 2007 include a breast health center at Phoebe’s Meredyth Plaza, where patients are screened using a new digital mammography machine; the electrophysiology program, for which a physician was brought on board; and new cardiac cath equipment.

The $31.2 million also includes $6 million in patient room renovations and more than $4.4 million for a central energy plant.

While reinvestment in FY ’07 decreased by $2.4 million over FY ’06, Phoebe’s total community benefit operations increased, as did its unreimbursed costs for indigent care, Medicaid and Medicare.

For fiscal ’07, the Albany- based hospital’s service to the community reached $13.9 million, compared with $11.5 million in fiscal year ’06. In FY ’05, those expenses were $14.9 million.

Unreimbursed costs for fiscal year 2007 were up $3.6 million to $79.2 million.

Together, the hospital’s community benefits and free and charity care were $93.1 million, compared with $87.1 million and $62 million in fiscal years 2006 and 2005, respectively.

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