Vanderbilt posts $28M operating gain as revenue grows 11% in FY Q1

Nashville, Tenn.-based Vanderbilt University Medical Center reported operating income of $28 million in the first quarter of the fiscal year, compared to an $11 million operating loss in the prior-year period.

Operating revenue increased $180 million, or 11%, year over year to $1.8 billion in the first quarter of FY 2024, which ended Sept. 30, according to financial documents published Nov. 28. The increase was driven by a 13% year-over-year rise in patient service revenue to $1.6 billion, primarily attributed to increased volumes in outpatient surgeries, emergency and ambulatory visits, acuity on inpatient services and a shift in payer mix to commercial payers from Tenncare, among other factors.

Expenses increased $141 million, or 9%, year over year to $1.77 billion in the quarter. The primary drivers are increases in salaries, wages and benefits of $48 million and supplies and drugs of $57 million. 

"The shortage of available nurses and other clinical personnel drove a sizable part of the increase," management said in the first-quarter report. "We continue to staff all available beds on our main campus due to increased demand for our high-end quaternary services, necessitating the continued use of travelers and other forms of temporary labor. However, we have seen significant decreases in the hourly rate for travelers (27% decrease from Q1 FY23) and total spend (a $27 million decrease compared to Q1 FY23) for these traveling staff and are developing and deploying internal programs to temper future utilization."

After factoring in the performance of its investment portfolio and other nonoperating items, Vanderbilt ended the quarter with a net gain of $45 million, a $63 million improvement on the $17 million net loss in the first quarter of FY 2023. 

Fiscal first-quarter operating EBIDA margin and operating margin were 5.3% and 1.6%, respectively, compared to operating EBIDA margin and operating margin of 3.1% and -0.7% in the prior-year period.

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