Ballad Health operating income almost quadruples, patient service revenue up $26.5M
By Jeff Keeling
Ballad Health’s operating income nearly quadrupled in its first full fiscal year after the Wellmont Health System-Mountain States Health Alliance merger following a strong fourth quarter (April-June).
A report to bondholders showed $36.46 million in operating income for fiscal 2019, compared to $9.9 million for the fiscal year that ended June 30, 2018. Net patient service revenue was $26.5 million higher than fiscal 2018, with $10.7 million of that gain coming in the fourth quarter alone. The figures are unaudited.
The improvements came despite declines in “acute discharges” (5.4 percent), surgeries (1.8 percent) and emergency room visits (3.8 percent). In its narrative, Ballad cited “exceptional expense management” as a primary driver of its improved financial performance.
Merger efficiencies and “improvements in productivity” helped drive personnel expenses down by more than $36 million, from $1.078 billion to $1.042 billion. Fully a third of that decrease came from a 26 percent decline in the use of contract labor, to $35.2 million from $47.9 million the previous year. Personnel-wise, only physician salaries increased, by $6.2 million to $187.1 million.
For the year, Ballad generated slightly more than $2 billion in net patient service revenue and crested $2.1 billion in total revenue. Operating margin of 1.7 percent was more than three times better than 2018’s 0.5 percent. Ballad also had $41.9 million in non-operating gains, compared to just $4.9 million in 2018, for EBITDA of $254.6 million – a 28 percent improvement over 2018’s $199.6 million.