Another sharp decline in investment income, along with an increase in employee spending, helped Novant Health Inc. report a loss of $356.7 million on Tuesday for the first half of fiscal 2022.
By comparison, Novant had an excess of revenue over expenses of $391.34 million in the first half of 2021. Excess of revenue over expenses in a nonprofit organization, such as Novant, equals profit in a for-profit business.
Nonprofit hospitals, such as Novant, Atrium Health Wake Forest Baptist and Cone Health, depend on investment income to grow their bottom line.
Excluding investment income and other non-core sources of income, Novant posted a loss of $40.6 million, compared to $135.5 million in operating profit a year ago. In the Triad, Novant owns and operates Forsyth, Clemmons, Kernersville and Thomasville Medical Centers, as well as Medical Park Hospital in Winston-Salem. The system has a total of 28,092 employees, including approximately 8,145 in Forsyth County. Total operating revenue for the first quarter was $1.79 billion, up 4.7% year-over-year.
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Base patient revenue fell 2.8% to $3.25 billion. Novant reported $308.7 million in “other income,” down from $246.7 million a year ago. Expenses were $3.6 billion, up 4.1%.
Wages and benefits rose 5.9% to $2.06 billion, in part because Novant in January 2021 raised the minimum wage for more than 2,000 employees across the system from 12.50 at $15 an hour. The system predicted at the time that nearly 900 Triad employees would benefit from the salary increase.
Spending on supplies and equipment rose 2.4% to $1.34 billion, with much of the increase stemming from rising costs for specialized COVID-19 treatments. Novant spent $187.1 million on capital investments in the first half, up from $140.5 million a year ago.
Novant’s report was listed without comment, as usual, on the Municipal Securities Regulatory Board’s website, www.emma.msrb.org. The reports are aimed primarily at bondholders and rating agencies and are generally submitted approximately two months after the end of a quarter.