CHARLOTTE/WINSTON-SALEM, NC -- Novant Health, a North Carolina based not-for-profit healthcare system, earned $80 million in operating income in 2007, slightly higher than the $79 million in 2006. The funds will be used to begin the construction of three new community hospitals in 2008 as Novant plans to invest $2 billion in facilities and medical technologies over the next five years.

In addition to its operating income, Novant earned investment income of $86 million, $35 million from the sale of real estate and an affiliated healthcare entity, and other income of $3 million related to the acquisition of MedQuest Associates. Combined, the health system's income from operations, investments and the gain from sale of assets produced a net income of $204 million (excess of revenues over expenses) in 2007, up slightly compared to 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," explained Paul Wiles, Novant Health president and CEO. "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 healthcare services closer to growing neighborhoods and communities. 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."

In 2007 at Novant healthcare facilities, emergency room visits increased 9%, outpatient cases 7%, surgeries 7%, inpatient days 2%, births 4% and physician clinic visits 15%.

Wiles also explained that the health system's net income also 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% 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 of 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 U.S. and around the world. Novant also recognized income from two other primary sources: 1) $8 million of deferred gain from the sale of several medical office buildings in 2006 and; 2) $27 million from the sale of a reference laboratory.

Novant's employment also grew in 2007. The health system employed 22,000 staff members by the end of 2007 compared to 17,700 in 2006. Several factors contributed to that growth: staff increases to serve a growing number of patients at existing hospitals and outpatient centers; rapid growth of the Novant Medical Group physician clinics; and the addition of the national MedQuest organization and Rowan Regional Medical Center to Novant Health. MedQuest joined Novant in November of 2007 and it operates 92 outpatient diagnostic imaging centers in the United States, two-thirds of which are located in the immediate five-state region of North Carolina, South Carolina, Georgia, Virginia and Tennessee. MedQuest centers offer services such as magnetic resonance imaging (MRI), computed tomography (CT), nuclear medicine, ultrasound, mammography, bone densitometry, fluoroscopy and x-ray. Located in Salisbury, NC, Rowan Regional Medical Center and its board decided in October of 2007 to join Novant Health. Rowan Regional is a 268-bed hospital and provides services such as emergency room, maternity center, surgery, diagnostics, rehabilitation and other specialty care such as hospice, home health, psychiatric and chemical dependency.

The growth of Novant drives its capital plan, explained Dean Swindle, Chief Financial Officer of the health system. He highlighted some of the major capital projects planned for the next five years. Novant is preparing to build three new community hospitals, all approved by the Certificate of Need (CON) program administered by the State of North Carolina: Brunswick Community Hospital, Forsyth Medical Center Kernersville and Presbyterian Hospital in the Mint Hill area. Major renovations are also being planned for Presbyterian Hospital's main campus near downtown Charlotte.

"We're also investing major capital funding in computer and information technology advancements," Swindle commented. "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. These are huge, complicated initiatives because they involve not only technology changes but also a new mindset for capturing essential medical and patient information. But electronic medical 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 explained. "Physicians have to spend too much time gathering information they need to diagnose and treat their patients. We believe Amalga will reduce that administrative burden."

Other trends highlighted 2007. The Novant Medical Group, consisting of physician practices from three regions surrounding Charlotte, Winston-Salem and Brunswick County, grew from 670 physicians in 2006 to 812 by year-end 2007. "Physicians from around the state have contacted us and are expressing interest in the group. Novant Medical Group recently established its own board of directors to assure that physicians provide the leadership necessary to help guide strategic decisions and planning for the entire Novant organization," commented Hayes Woollen, MD, President of the Novant Medical Group. "Last year several physician clinics from the Triangle area also joined the Novant Medical Group."

Novant Health consists of 262 physician clinics and nine hospitals in North Carolina's Charlotte, Triad and southeastern regions: Presbyterian Hospital, Presbyterian Orthopaedic Hospital, Presbyterian Hospital Huntersville and Presbyterian Hospital Matthews of the Charlotte area; Rowan Regional Medical Center in Salisbury; Forsyth Medical Center, Medical Park Hospital and Thomasville Medical Center in the Triad region; and Brunswick Community Hospital along the coast. Other facilities and programs of Novant Health include the following: MedQuest imaging centers with 92 locations in 13 states; two nursing homes; outpatient surgery and diagnostic centers; rehabilitation programs; and community health outreach services. Novant Health is ranked 4th nationally among the Top 100 Integrated Healthcare Networks, an analysis conducted by the national Verispan health informatics company.