Cone Health finished its fiscal 2018-19 on an up financial note as it relates to core operations, the not-for-profit health system reported Tuesday.
However, a one-time $75.2 million pension settlement expense led to an overall $18.8 million excess revenue loss for the fiscal year.
For a not-for-profit organization, excess revenue is equivalent to profit in a for-profit organization.
The Greensboro-based system did not provide an explanation of the settlement in its annual report filed on the Municipal Securities Rulemaking Board’s website, www.emma.msrb.org.
Cone spokesman Doug Allred said Wednesday the system closed its defined benefit pension plan during the fiscal year.
“They paid employees in the plan the money they had accrued,” Cone said. “Cone Health removed the liability from its books, and the employees in the plan got the money this year they would have received in future years.”
“The money was set aside. Just paid out now instead of later.”
The Emma reports are aimed primarily at bondholders and ratings agencies, and are typically released about two months after the end of a quarter.
The Cone system has six hospitals, 1,254 licensed beds and more than 12,000 employees.
Cone had a 9.7% increase in core revenue to $2.19 billion. It had “premium” revenue of $144.8 million paid to the system’s Medicare Advantage plan, up 16.4%. Other operating revenue fell 32.8% to $66.4 million.
Overall expenses rose 9.6% to $2.13 billion, including a 7.5% increase in salaries and wages to $783.7 million.
Cone said the increased supplier costs were most related “growth in drugs for specialty, contract, and Cancer Center pharmacies, and by growth in supplies for surgeries and procedural volumes.”
The system reported a 76.5% decrease in investment income compared with a year ago to $22.7 million.
Cone had a 5.2% increase in outpatient visits to 971,401. Surgical procedures were up 0.4% to 41,517, while emergency-room visits dropped 2.2% to 345,685.
Medicare and Medicaid represented 46.5% of reimbursement and source of payments, while commercial and managed care was 45.9% and self-pay was 1.7%.