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Vidant Health board approves 2016 operational plan and budget; State budget causes concern, uncertainty

August 25, 2015 by Beth Anne Atkins

GREENVILLE —As Vidant Health continues to assess the potential impacts of an incomplete state budget, including the uncertainty of Medicaid reform, its Board of Directors approved the fiscal year 2016 operational plan today. 

Dr. Marcus Albernaz, board chairman, thanked the board committees for their direction and contributions over the past several months in bringing together an operational plan and budget that “focuses providing high quality, affordable health care across the communities Vidant Health serves.” 

Leaders will continue to focus on the most effective and efficient way to provide health care in eastern North Carolina, which will include streamlining processes and finding ways to decrease the cost of care. 

Dr. Albernaz also emphasized that “Vidant Health continues to be a healthy organization, despite the fiscal challenges that are being created by changes in state and federal programs as the health care industry continues its transition from a payment system that is based on volume to a payment system that is based on the value of the care that is provided.” 

This budget provides the funding necessary to continue Vidant’s position as the health care safety net for eastern North Carolina. However, there is still uncertainty regarding the proposed changes in state law that could affect more than $100 million in funding for Vidant Health. 
“It’s hard to present a budget without knowing what lawmakers will ultimately decide about funding for graduate medical education, Certificate of Need laws, Medicaid reform and how sales tax for non-profits will be addressed,” said David Hughes, chief financial officer, Vidant Health. “With seven community hospitals serving 29 counties and Vidant Medical Center in Greenville, more than 70 physician practices, home health, hospice, wellness centers and numerous community partners across the region, we care for those who are the most medically fragile and socioeconomically challenged in the state and our mission could be in jeopardy.”
As a not-for-profit corporation, Vidant Health reinvests all of its income back into capital projects, equipment and access to services for the patients and communities it serves. In fiscal year 2014, the system invested $38 million in capital assets, which included investments in information systems across Vidant Health, as well design and planning of the construction of the new cancer tower on the Vidant Medical Center campus. 

During the next year, Vidant Health will continue its commitment to Belhaven and its surrounding community through the construction of a new 24-hour multi-specialty clinic, scheduled to be completed in summer 2016. The 12,000-square foot facility will include an adjacent helipad for quick transport to a higher level of care. Also, Vidant Beaufort Hospital will see the beginning of the renovation and expansion of its emergency department in the next year. 

Additionally, the system will reinvest $187 million on the continued construction of the new cancer center, which is scheduled to be completed in fiscal year 2018. Additional investments are being made in information systems, diagnostic services, normal equipment replacement and much-needed upgrades in the core infrastructure of the system’s hospitals. If further reductions in reimbursement occur, the ability to fund these capital requirements will be at risk.

The budget for the 2015-16 fiscal year projects total operating and non-operating revenues of $1.649 billion, operating and non-operating expenses of $1.579 billion, excess-of-revenues over expenses of $70.3 million and an operating margin of 2.7 percent. Any margin will be reinvested back into facilities, new services, equipment and system employees. 

The system estimates providing care to approximately 65,000 inpatients, supporting 1,186,000 combined emergency department and outpatient and ambulatory visits, performing 46,000 surgeries and delivering 6,000 babies during the next fiscal year.

Mr. Lawrence Davenport, finance committee chairman, explained the budget emphasizes building on the high-quality patient care already provided throughout the system. The budget also recognizes the importance of the system’s 12,000 employees through a budget committed to funding salaries and benefits of $894 million. 

Vidant Health includes Vidant Medical Center, Vidant Beaufort Hospital in Washington, Vidant Bertie Hospital in Windsor, Vidant Chowan Hospital in Edenton, Vidant Duplin Hospital in Kenansville, Vidant Edgecombe Hospital in Tarboro, Vidant Roanoke-Chowan Hospital in Ahoskie, and The Outer Banks Hospital at Nags Head, where it is a 60 percent owner. The Outer Banks Hospital board will adopt its budget separately. Vidant Health also includes Vidant Wellness, Home Health and Hospice and Vidant Medical Group. 

Vidant Health is affiliated with the Brody School of Medicine at East Carolina University.
 
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