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17 CFO / FINANCE Tenet posts surprise $99M profit after expanding cost- cutting plan By Ayla Ellison D allas-based Tenet Healthcare, which operates 69 hospitals, saw its financial picture signifi- cantly improve in the first quarter of 2018. e for-profit hospital operator ended the first quar- ter of 2018 with revenues of $4.7 billion, down slightly from $4.8 billion in the same period of the year prior. On a same-facility basis, Tenet's ambulatory segment revenue climbed 2.7 percent year over year. Tenet's sur- gical business, which represents the majority of reve- nue in the ambulatory segment, saw same-facility reve- nue grow 2.3 percent year over year, while non-surgical business revenue increased 11.8 percent. Tenet said strong growth in urgent care visits, due in part to the severe flu season, helped fuel the non-surgical business revenue growth. Tenet reported a 0.5 percent year-over-year increase in revenue attributable to its business services subsidiary, Conifer Health Solutions. Tenet is exploring the sale of Conifer, and the company is expected to decide wheth- er to sell the business during the first half of 2018. Aer factoring in operating expenses and one-time costs, Tenet reported net income attributable to share- holders of $99 million, which surpassed the company's expectations and was up significantly from a net loss of $53 million in the same period a year earlier. "e actions we have taken to be a more efficient, ag- ile and decisive organization have resulted in stronger financial performance," Ronald A. Rittenmeyer, ex- ecutive chairman and CEO of Tenet, said in an earn- ings release. "We are continuing our focus on improv- ing quality, growth and financial results and will be exploring additional opportunities to enhance margins and shareholder returns." Aer reporting a net loss in the third quarter of 2017, Tenet launched a $150 million enterprisewide cost re- duction initiative, which involved renegotiating con- tracts with suppliers and vendors, as well as eliminat- ing about 1,300 jobs. In December, Tenet expanded the cost-cutting plan to $250 million. e company said the plan involves divesting hospitals in non-core mar- kets and cutting 2,000 jobs, or about 2 percent of the company's workforce. Tenet's hospital divestiture plan is expected to yield more than $1 billion of proceeds. A presentation pub- lished with the company's first-quarter financial results said Tenet received approximately $550 million from divestitures in the first quarter of 2018. n Erlanger's Q3 earnings set back from Epic rollout By Kelly Gooch C hattanooga, Tenn.-based Erlanger Health System fell short of its budgeted earnings in the third quarter following the sys- tem's Epic implementation, according to the Times Free Press. On April 23, Erlanger CFO Britt Tabor told the system board's bud- get and finance committee Erlanger ended the third quarter with net income from operations of approximately $4.05 million, which was below the system's budgeted income of $8.27 million, according to the report. Mr. Tabor told the committee the Epic implementation "was a huge impact, and that was not unexpected." Erlanger announced the Epic project, expected to cost about $100 million over 10 years, in 2015. Erlanger implemented Epic for inpatient services in October 2017, but billing was delayed throughout the next month as issues were worked out, according to the report. This delay resulted in slowed payments and increased net days in accounts receivable. The system's net days in accounts receivable increased from 63 in September 2017 to 71 in March 2018, reported the Times Free Press. This increase occurred as Erlanger worked to ensure correct bills. Mr. Tabor said he is pleased with the third-quarter results overall, not- ing he expects to see improvement in the fourth quarter and still meet the annual budget, according to the report. n Idaho hospital faces cash crunch after software glitch causes billing problems By Ayla Ellison B enewah Community Hospital in St. Maries, Idaho, faces a cash shortage after it implemented new Cerner software that caused billing problems, according to the St. Maries Gazette Record. The hospital, which is owned by Benewah County, worked with Cern- er for 15 months to implement the software, but the problems report- edly didn't come to light until after the hospital went live following a software update. The hospital can bill private insurers properly, but the software glitches prevent it from billing Medicare. "Because of the lag between providing services and issuing bills, we did not encounter the problem for about a week after we went live," Dan Hammes, chairman of the hospital board, told the St. Maries Ga- zette Record. The Benewah County commissioners said the county will loan the hospital money until the software issue is resolved. Mr. Hammes said the hospital's billing department is working closely with Cerner to fix the issue. Mr. Hammes said the hospital's cash flow will return to normal about three weeks after the software is fully functional because it takes 21 days after bills are submitted to Medicare for the hospital to receive payment. n