WellStar’s total revenue rose by 5.7 percent from last year’s $1.46 billion, tipping the large nonprofit over the $1.55 billion mark for fiscal 2013, which ended June 30.
According to WellStar’s combined balance sheet for fiscal 2013, total expenses increased nearly 8.5 percent, or $114 million, meaning WellStar had a surplus after its expenses were paid this year of $67 million, compared to $97.5 million in fiscal 2012.
Because of these expenses, fiscal 2013 saw a drop in WellStar’s cash flow, with $168.5 million or 187 days of cash in 2013 down from $182.8 million or 232 days in 2012.
Moody’s Investors Service, a leading provider of credit ratings, research and risk analysis, gave WellStar a high-quality rating and a very low credit risk in a report released Oct. 25.
The favorable rating was based on “manageable debt load and adequate liquidity measures and a track record of strong financial performance,” according to the report. “Moody’s affirms WellStar Health System’s Aa3.”
Jim Budzinski, executive vice president CFO of WellStar Health System, said WellStar is the “community’s health system,” and he is “proud to be part of an organization that puts people first.”
Budzinski said WellStar’s 13,000 employees are working hard to provide better quality health care at a lower cost. He added the cost on average to treat a patient today is less than it was in 2008.
Investing in Hiram
hospital, ‘health parks’
WellStar had a 23 percent increase in property and equipment assets, from $747 million in fiscal 2012 to $919 million in 2013.
Part of the investments included funding large capital projects and a new information technology system.
In March 2012, the WellStar Board of Trustees approved a $125 million investment to implement WellStar Connect, which will allow patient records to be accessed across the entire network of care providers.
With five hospitals already in the WellStar network, $125 million will be spent to replace the Paulding Medical Center with a new eight-story facility in Hiram, on the corner of Charles Hardy Parkway and Jimmy Lee Smith Parkway.
The facility, opening in April, is the first hospital built in the WellStar network since 1952 that is entirely new, Budzinski said.
WellStar will also build the WellStar Vinings Health Park, a 162,000-square-foot facility on more than 25 acres at 4441 Atlanta Road, west of Interstate 285 near the East-West Connector.
Construction of the complex is scheduled to start late next summer and is estimated to cost $68 million, according to Joe Brywczynski, senior vice president of health parks development.
In July 2012, WellStar opened a three-story, 70,000 square-foot Acworth Health Park at 4550 Cobb Parkway just north of Cedarcrest Road, which cost $29 million.
WellStar also broke ground on the East Cobb Health Park in April, a four-story, 188,000-square-foot building northeast of Marietta off Roswell Road, which is expected to cost $80 million and open next September
The expanding of the health care network is part of a long-term capital investment plan that will cost WellStar $888 million between fiscal 2014 and fiscal 2018.
Budzinski said while “WellStar is fortunate to be in a growing part of metro Atlanta,” it does mean the network has to anticipate the area’s health care needs 30 years down the line.
The WellStar expansion has happened during a down economy, but the uncertain economic future does not make Budzinski any less confident on the success of these projects.
“It is a very dynamic time for the health care industry,” Budzinski said.
This year, WellStar had a jump in liabilities, including salaries, benefits and debt, by 16 percent, from $158 million in fiscal 2012 to $183 million in 2013.
But, according to Moody’s Oct. 25 report, WellStar benefits from a strong market presence, good geographic coverage and physician alignment strategies by the management team.
For instance, a six-surgeon practice that has been operating in Marietta since 1988 was acquired by the WellStar Medical Group in early September for more than $200,000.
WellStar Health System serves a population of nearly 1.4 million in five counties, but that presence comes with a price, and one that often goes unpaid.
More than 10 percent of health care provided in fiscal 2013 was to patients without insurance, according to the “Together We Can” 2013 WellStar Community Report.
“WellStar incurred over $85 million for charity care provided to patients in Bartow, Cherokee, Cobb, Douglas and Paulding counties in FY 2013,” stated the 2013 WellStar Community Report.
It also stated that WellStar lost $24 million in reimbursements from caring for Medicaid patients and $58 million for Medicare patients.
Problems with Obamacare
Budzinski said the roll-out of Obamacare has left many people disappointed and confused about the new regulations on required health care insurance coverage.
The projections of how many people will be covered under Obamacare was overstated, Budzinski said, but the success of the new policy is hard to predict.
“It is something we have never done before as a country,” Budzinski said.
But, Budzinski said that, from a business angle, anyone gaining insurance coverage who is treated by WellStar will benefit the nonprofit health system’s bottom line.
The revenue would be reinvested by WellStar back into providing better treatment and services to the community, Budzinski said.