EHR Install Dampens Wellmont's Operating Margin

Wellmont Health System, a seven-hospital network based in Kingston, Tenn., experienced lower operating results in the first six months of its 2014 fiscal year due to its electronic health record installation, according to a Fitch Ratings report.

In December 2013, Wellmont went live with its Epic EHR system with its physicians. Wellmont's hospitals just went live this past March.

Overall, Wellmont posted a 1.2 percent operating margin in the first six months, compared with a 1.6 percent operating margin in the same period a year ago. However, Wellmont officials expected operating metrics would be lower, and they budgeted for $13.5 million of implementation expenses, some of which were incurred in the first half of the year. The hospital system is actually ahead of budget with its EHR implementation, and Fitch expects Wellmont's performance will improve by the end of the year.

Wellmont is in the process of exploring affiliation and merger options with other organizations. Officials announced their intent this past January, citing stagnant Medicare reimbursement rates, high volumes of Medicaid and uninsured patients and a lack of Medicaid expansion in Virginia and Tennessee, where its hospitals and clinics are located. Wellmont posted $798.2 million in total revenue in FY 2013.

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