Ballad Health recently announced operational results from its first six months of the fiscal year, and quarterly results for the second quarter of FY 2019. The announcement coincided with the announcement by Moody’s Investor Services that Ballad Health’s outlook has been revised from Neutral to Positive.
The report was headlined by positive financial news. Ballad’s operating cash flow and total cash flow were both up when compared to the second quarter of 2018, and an 0.6 percent increase in expenses was more than offset by a 1.3 percent increase in revenue. Ballad also boasted improvements in several areas related to patient care. In the first six months of the fiscal year, 14 of 17 Target Quality Measures and 8 of 13 Priority Measures identified in the Certificate of Public Advantage (COPA) that regulates Ballad Health improved from the baseline period.
“Ballad Health’s operational performance is exceptional because of the incredible work of our team members and affiliated physicians,” said Alan Levine, chairman, president and chief executive officer of Ballad Health. “I am proud of the focus on quality, and I believe our results demonstrate that better quality reduces cost, improves outcomes and generates positive financial performance for our community’s health system.”
Ballad credits improvements in productivity, reduced reliance on temporary labor and focused supply cost management for improved financial performance in the second quarter and in the year-to-date. While Ballad has been focused on improving its financial performance, it also has continued to invest nearly $60 million in capital for new equipment, diagnostic technology, information technology and building improvements.
Ballad’s investment into the region’s labor force continues to be powerful as the healthcare provider reported spending more than $500 million on salaries, wages and benefits in the six-month year-to-date period. Ballad Health projects it will spend more than $1 billion on the region’s labor force during the current fiscal year.
The report also acknowledges some challenges the new healthcare provider is currently facing. For example, there has been a decline in demand for both inpatient and outpatient surgery, and emergency room visits declined by 5.2 percent. As is the case in most rural areas across the nation, Ballad is experiencing a continuing decline in inpatient and hospital utilization rates.
“Ballad Health is facing a rapidly changing landscape where our financial success is no longer judged solely by volume, but increasingly, how we care for fewer people more efficiently, effectively and with better outcomes,” said Levine. “Many of the quality metrics that we’ve seen improve have led to lower costs. Shorter length of stay, reduced rates of hospital-acquired conditions, reduced readmissions and better integration with physicians have helped reduce the cost of care and helped Ballad Health achieve success with the new value-based purchasing environment.”