Centra blames operating loss on Cerner EHR go-live

Lynchburg, Va.-based Centra Health posted an operating loss in the first nine months of fiscal year 2018, which the system attributed to its Center EHR rollout, according to unaudited financial documents.

Centra Health's net operating income decreased from $18.8 million for the nine months ended Sept. 30, 2017, to an operating loss of $2.7 million for the same period in 2018. The system said the ramp-up of resources required for its phase one Sept. 1 Cerner go-live, along with reduced clinic volumes, led to the loss.

The phase one implementation at the five-hospital system and more than 60 ambulatory sites will cost Centra $65 million. The second phase is slated for 2019 at the system's remaining ambulatory and post-acute facilities. Centra said the investment "will enhance technology to improve external reporting of health and quality outcomes."

Centra posted higher total revenue compared to the prior year's nine-month period: $813.4 million in 2018 compared to $745.5 million in 2017. A $67.9 million increase in total operating revenue was primarily driven by a $65.6 million increase in net patient service revenues, thanks to a 15 percent price hike that went into effect Jan. 1, 2018.

However, Centra's total operating expenses outpaced its revenue gains due to increases in labor and supply costs. In the nine months ended Sept. 30, the system saw expenses climb from $726.7 million to $816.1 million year over year.

After accounting for nonoperating losses, Centra ended the nine-month period with net income of $4.7 million, down from $21.6 million in the same period a year prior.

More articles on healthcare finance:
Physician group with 873 employees files for bankruptcy   
HHS to launch new mandatory bundled payment models: 4 things to know   
How CHS, Tenet, HCA, LifePoint and UHS fared in Q3    

© Copyright ASC COMMUNICATIONS 2020. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.

 

Featured Webinars

Featured Whitepapers