Ballad Health posts $36M operating income, plans annual $10M investment in nurse raises

Johnson City, Tenn.-based Ballad Health said it improved financial and quality performance in fiscal year 2019 as the health system continued to invest in staff and the region.

The 21-hospital nonprofit health system saw a 1.3 percent year-over-year revenue increase in the fiscal year ended June 30, while expenses stayed flat, according to a news release.

Ballad said the revenue boost and flat expenses resulted in an operating margin of 1.7 percent in fiscal year 2019, up from 0.5 percent in fiscal year 2018.

Overall, the health system ended fiscal year 2019 with operating income of $36.5 million, an increase from $9.9 million in fiscal year 2018.

Ballad attributed the health system's improved financial performance to "dedicated expense management, improvements in productivity, reduced reliance on temporary/contract labor and focused supply cost management."

On the quality side, Ballad noted various improvements since Feb. 1, 2018, when the health system was created through the merger of Kingsport, Tenn.-based Wellmont Health System and Johnson City-based Mountain States Health Alliance. Some of the improvements included a 47 percent reduction in pressure injuries is, a 42 percent decrease in clostridium difficile infections, and a 13 percent reduction in central line blood stream infections.

"Ballad Health is facing a rapidly changing landscape where our financial success is no longer judged solely by volume, but increasingly, how we care for fewer people more efficiently, effectively and with better outcomes," Alan Levine, chairman and CEO of Ballad Health, said in a news release. "Many of the quality metrics that we've seen improve have led to lower costs. Lower lengths of stay, reduced rates of hospital-acquired conditions, reduced readmissions and better integration with physicians have helped reduce the cost of care and helped Ballad Health achieve success with the new value-based purchasing environment."

In addition to improved financial and quality performance, Ballad has continued to invest in staff, system upgrades and improving access to care in the Wise County, Va.-based region.

Ballad said will invest $10 million annually into increasing direct patient care nursing wages, which represents the health system's entire operating income in fiscal year 2018. Additionally in fiscal year 2019, it also continued to invest nearly $200 million in capital improvements such as new equipment, facility upgrades and information technology infrastructure.

In terms of investments into the region, Ballad announced it submitted a plan to Virginia officials for service changes in Wise County, according to local TV station WJHL. In a news release cited by WJHL, Ballad said its three facilities in Wise County will remain open and it plans to add behavioral health services and upgrade oncology services in the area. In preparation for adding these services, Ballad plans to move inpatient and critical care services from Mountain View Regional Hospital in Norton, Va., to Lonesome Pine Hospital in Big Stone Gap, Va., among other steps.


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