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Novant Health reports 2017 audited financial results


WINSTON-SALEM, N.C., April 2, 2018 – Novant Health today announced 2017 audited financial results for the year ended Dec. 31. For 2017, Novant Health reported net income of $477.9 million on operating revenues of $4.6 billion. The not-for-profit health system also reported $794.4 million in total community benefit (including charity care and unpaid cost of Medicare and Medicaid), up from $725.5 million in 2016. Novant Health provided $138.9 million in financial assistance to members of our communities in 2017.

Fiscal year 2017 net income, also referred to as excess of revenues over expenses, was comprised of $174.4 million in operating income, $303.4 million in non-operating income, including investment income of $307.8 million. The 2017 financial results compare with 2016 operating income of $271.0 million, $184.2 in non-operating income, including investment income of $151.1 million.

Carl S. Armato, president and CEO of Novant Health, commented that the organization made a significant investment in its team members by awarding over $111 million in bonus income in 2017.

"In 2017, Novant Health continued to invest in its team members, staying true to our commitment of being world-class at caring for our people so they can be world-class at caring for our patients,” said Armato. “Every eligible team member received a bonus in 2017. Additionally, Novant Health invested in opening access to quality health care in our communities by opening about one new clinic a week – helping people stay healthy and out of the hospital.”

The uncertainty around the future of the Affordable Care Act increased turbulence in the health care industry during 2017, said Fred Hargett, chief financial officer for Novant Health. With continued pressures in the industry, Novant Health has managed itself responsibly to prepare for the ongoing challenges of the future.

"Novant Health continues to maintain a healthy balance sheet which positions us strongly to be able to  invest in our people and our communities, despite swings in health care utilization,” said Hargett. “While our organization has done a remarkable job in helping people in the communities we serve sign up for health insurance coverage under the Affordable Care Act, the uncertainty out of Washington caused concern among those who qualified for insurance from the marketplace. As a result, many elected to stay away from the doctor and ended up in our emergency rooms. Stabilization of the market is needed, and we look forward to working with our elected officials in 2018 to help bring about that change.”

Organizational initiatives invest in people and expand access to health care

In 2017, Novant Health added a key statement about the value of its people to its mission, vision and values. The new credo reads, “We are an inclusive team of purpose-driven people inspired and united by our passion to care for each other, our patients and our communities.” The statement underscores the importance of team members in the health of the community and the organization.

“Without our remarkable team members, we would not be Novant Health,” said Armato. “We are devoted to helping our people be change-ready and resilient to combat the stresses they face in this ever-changing industry. In 2013 we launched the physician wellness and resiliency program and, in 2017, we doubled down on our efforts and expanded the program to nurses. Since 2013, about 2,000 Novant Health physicians, nurses and executive leaders have completed the program, which we call the Novant Health One Team Leadership Experience.”

The organization also invested in access to health care with several key projects. In 2017, capital investments totaled $286 million and, in addition to ongoing investments in technology, key construction projects included:

  • Completion of Novant Health Clemmons Medical Center, adding 36 beds and three operating rooms.
  • Opening of Novant Health Charlotte Orthopedic Hospital with 32 beds and seven operating rooms.
  • Continued construction of Novant Health Mint Hill Medical Center, scheduled to open with 36 beds in fall 2018.
  • Groundbreaking to add 48 beds to Novant Health Huntersville Medical Center.
  • Expanded the use of our electronic medical record. Today more than 800,000 people are registered Novant Health patient portal users.

Community benefit aligns with community needs
Across the system, Novant Health offers programs and activities to improve access to health care services, enhance the health of the community, advance medical or health knowledge, or reduce the burden on government to provide health services. In 2017, Novant Health provided $62 million in community benefit programs that address the most pressing needs of the communities we serve.

In Haymarket, Virginia, we brought heart-health education to adults who need it. In Matthews, North Carolina, we offered free body mass index screenings and in Salisbury, North Carolina, we held classes about healthy eating and exercise. Women in Manassas, Virginia, received grant-funded mammograms and cancer education. In Culpeper, Virginia, we screened seniors for osteoporosis and diabetes, while in Thomasville, North Carolina, we held senior-specific classes on everything from nutrition to mental health.

Additional ways Novant Health has made an impact include:

  • Novant Health Brunswick Medical Center collected more than 2,000 supplies for a back-to-school drive and 1,000 cans of food for Brunswick Family Assistance.
  • Novant Health Forsyth Medical Center taught more than 500 new and expecting parents through free classes in childbirth preparation, infant CPR and newborn care. Additionally, Project CARE provided health and wellness services to members of 13 of Winston-Salem’s African-American congregations who are at high risk of chronic diseases, such as heart disease, type 2 diabetes and stroke.
  • Novant Health Kernersville Medical Center provided Remarkable You screenings in community senior centers, churches, YMCAs and schools.
  • Novant Health Clemmons Medical Center offered nutrition lectures, support groups and grocery store tours teaching label literacy and healthy food options for more than 300 people.
  • Novant Health UVA Health System Culpeper Medical Center provided seniors with free osteoporosis and diabetes screenings.
  • Novant Health UVA Health System Haymarket Medical Center hosted community-based lectures on heart health that drew more than 100 attendees.
  • Novant Health Huntersville Medical Center provided care at free clinics and community care sessions through residents with the Novant Health Family Residency Program.
  • Novant Health Matthews Medical Center completed body mass index screenings for almost 1,000 people and facilitated “First Steps” support groups to encourage weight management.
  • Novant Health Medical Park Hospital arranged cardiovascular screenings for community members to assess their risk of diabetes, obesity and hypertension.
  • Novant Health Presbyterian Medical Center provided more than 1,500 individuals free mammograms and health education on cancer prevention and awareness.
  • Novant Health UVA Health System Prince William Medical Center assisted more than 500 women with health education and screenings on a variety of topics, including breastfeeding, diabetes, heart health, breast cancer and postpartum depression.
  • Novant Health Rowan Medical Center taught participants weight loss and nutrition strategies through a five-week “Commit to be Fit” class series. Classes included instruction for label reading, recipe modification, daily diet and activity logs, portion control and learning about the role metabolism plays in weight loss. Participants received a notebook, pedometer, weekly handouts and a five-week YMCA pass.
  • Novant Health Thomasville Medical Center supported more than 1,500 seniors with health education on a variety of topics, including nutrition, mental health and substance use.

In 2017, the unreimbursed costs to provide health care services to Medicare and Medicaid patients were $486.6 million and $107.1 million, respectively. Bad debt, which is not included in community benefit reporting, was up slightly from 2016 at $212.9 million.

 

Financial summary (in millions of dollars) 

 

2017

2016

Operating revenues

$4,595.4

$4,340.1

Operating expenses

$4,421.0

$4,069.1

Operating income

$174.4

$271.0

Investment income (loss)

$307.8

$151.1

Other non-operating income (expense)

($4.3)

$33.1

Net income

$477.9

$455.2

Posted on Monday, April 02, 2018
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