- Still working to recover from operating losses associated with implementing Epic EHR system into Wake Forest Baptist Medical Center, the head of the healthcare organization remains optimistic that the decision to go and stick with Epic will pay off in the long run.
Owen Covington of The Business Journal is reporting that third-quarter results for Wake Forest Baptist show an operating loss of $62.8 million. As of the end of its third quarter, the organization saw $1.2 billion in net patient revenue, which is close to $20 million less than last year’s figure. The operating loss of $62.8 million year-to-date varies dramatically from the net operating gain of $38.9 million just one year ago.
Although the center’s CFO Ed Chadwick told participants in an investors call that the third quarter showed improvements over the second quarter with a positive trend continuing in the fourth quarter, the turnaround can be attributed to strategic cost-cutting efforts and investments.
In April, the Winston-Salem Journal reported that Wake Forest Baptist’s plans to cut as many as 950 jobs, with 475 of those representing current employees, by the end of June 2013. Additionally, The Business Journal revealed that the organization eliminated management incentive compensation and reduced contributions to employee retirement accounts to a 2 percent match. Coupled with the gains of $54.6 from investments, Wake Forest Baptist was able to shave its deficit.
“If you look at that operating loss against our best estimate of the impact of the Epic go-live, essentially all of our operating loss is accounted for by the one-time Epic impact operating costs and business disruption,” Chadwick said during the investors call.
Various sources have reported the figure for cost of the Epic EHR in the area of $13.1 million. This, however, was followed by another $8 million for other expenses related to the implementation of the EHR system. Volume disruptions during the go-live in September 2012 and the need for training contributed to $26.6 million in lost margin and 4.1 percent decrease in operating room cases, respectively.
In March when Moody’s Investors Service downgraded Wake Forest Baptist from Aa3 to A1, the service indicated that “the unexpected decline in financial performance through the first half of FY 2013 largely due to the installation of a new information technology platform (encompassing 95% of all revenue components of the enterprise).”
A recent notable event that has taken place in the interim is the resignation of the organization’s CIO Sheila Sanders, who was hired to oversee the implementation of the Epic EHR. At the time, a spokesman for Wake Forest Baptist stated that Sanders’s decision to step down was her own and not the result of the Epic implementation.
In a situation similar to Wake Forest Baptist’s, Stephanie Bouchard of Healthcare Finance News reported that Maine Medical Center last month reported an operating loss of $13.4 million, listing the implementation of its Epic EHR as one of many factors contributing to the loss.