A recovery in its investment income portfolio and a significant gain in core earnings lifted Novant Health Inc. to a 47.2% increase in excess revenue over expenses to $385.3 million for the fourth quarter.
Excess revenue in a for-profit organization like Novant equals profit in a for-profit business, while a deficit equals a loss.
Novant had $167.6 million in investment income in the fourth quarter, compared with just under $156 million a year ago.
For-profit hospitals such as Novant, Atrium Health Wake Forest Baptist and Cone Health depend on investment income to boost their bottom line and help pay for capital investments.
Total operating income rose 52.5% to $218.8 million in the fourth quarter.
Total operating income was $2.52 billion, up 14.7% year over year. The breakdown was $2.25 billion in net patient service revenue, along with $268.6 million in “other revenue.”
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Meanwhile, spending was just under $2.3 billion, up 12.1%.
Wages and employee benefits increased 2.3% to $1.18 billion. Supplies and equipment expenses rose 36.7% to $998.8 million, with much of the increase coming from higher costs related to specialized treatment for COVID-19.
For the full 2023 fiscal year, Novant reported $460.8 million in additional revenue, compared with a loss of $222.8 million a year ago.
It had $146.8 million in operating income, compared with $68.2 million a year ago.
Total operating income was $8.29 billion, up 9.8%, while operating expenses rose 8.9% to $8.15 billion.
Novant spent $520.9 million on capital expenditures in fiscal 2023, compared to $466.3 million in fiscal 2022.
Novant’s report was listed without comment as usual on the Securities Rulemaking Board’s website, www.emma.msrb.org.
The reports are primarily aimed at bondholders and rating agencies and are usually filed about two months after the end of the quarter.
Novant is based in Winston-Salem, but has a major presence in Charlotte and Wilmington.
It operates 18 hospitals, including Forsyth, Clemmons, Kernersville and Thomasville Medical Centers and Medical Park Hospital in Winston-Salem.
On Feb. 1, Novant completed its $2.4 billion purchase of three South Carolina hospitals from Tenet Healthcare Corp. – Hilton Head Hospital, Coastal Carolina Hospital in Hardeeville and East Cooper Medical Center in Mount Pleasant.
By comparison, Novant paid $5.3 billion in January 2021 to buy New Hanover Regional Medical Center of Wilmington.
Prior to the purchase of SC Hospitals, Novant had more than 1,900 physicians and more than 36,000 employees providing care at more than 800 locations, including 15 hospitals. There are about 8,145 employees in Forsyth County.
