While trying to increase its footprint in South Florida and solidify its status as the healthcare giant of the region, Baptist Health South Florida’s revenues rose slightly but its profits were slashed as a result of higher expenses, according to its latest report to bondholders.
Baptist’s increased expenses include expansion of its cardiac facility in Kendall and building and staffing a new cancer center, slated to open in 2016.
For the three months ended March 31, Baptist Health’s revenues rose to $582 million, a 7 percent increase over its 2014 levels. During the same period, its after-tax income fell 55 percent, from $81 million to $36 million.
Part of the dropoff in the net income stemmed from higher expenses, which rose to $576 million for the quarter, an 11 percent increase over the $519 million in expenses in the previous year’s quarter. The two areas most responsible for the leap — wages, salaries and benefits, and administrative and general expenses — each cost $21 million more than they did in the first three months of 2014.
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Wages, salaries and benefits accounted for about $313 million this year, compared to just over $291 million in 2014. Administrative and general expenses claimed about $124 million this year and about $103 million last year.
Ralph Lawson, chief financial officer and executive vice president at Baptist Health, said the added costs were expected. The system is building a $430 million cancer center that will open at Baptist Hospital next year and spending $100 million to expand its existing Miami Cardiac & Vascular Institute in Kendall, among other investments “in preparing for the future.”
“We operate our business to generate enough revenue to continue providing the most advanced care to our community,” Lawson said in a statement. “Given the recent changes in the healthcare landscape, we have been able to anticipate the current challenges and are well-positioned to adapt to them.”
And Baptist Health isn’t slowing down anytime soon. The Miami Beach planning board will vote on the health system’s proposed urgent-care center on Alton Road next week.
Follow @MHhealth for health news from South Florida and around the nation. This story was produced in collaboration with Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.