The professional trade association that represents healthcare chief financial officers lost nearly $2 million in its latest fiscal year.
The Healthcare Financial Management Association disclosed the results in the October issue of its Healthcare Financial Management monthly journal.
For its fiscal year ended May 31, the Westchester, Ill.-based association lost $1.9 million on total revenues of $14.7 million. The previous fiscal year, the HFMA turned a profit of nearly $1.1 million on total revenues of $15.1 million.
In addition to the 2.2% drop in revenues, total expenses incurred by HFMA rose nearly 19% to $16.7 million for the year, compared with $14 million the previous fiscal year.
Driving the increase in expenses was a 16.4% jump in personnel expenditures to $5.9 million from $5.1 million, and a 66% rise in expenditures on outside professional services to $1.8 million from $1.1 million.
The HFMA's total assets and membership also declined. Total assets fell to about $14.4 million from about $17.2 million, and membership dipped to 34,758 from 35,288.
HFMA President and Chief Executive Officer Richard Clarke said he didn't think it was ironic that a group representing financial experts had a bad year, because the year wasn't as bad as it seemed on the surface.
"Not if you sit back and think through what we're trying to accomplish," Clarke said.
By the end of the previous fiscal year, HFMA was sitting on $12 million in cash and investments, and a $14 million budget. That was nearly 300 days' cash on hand, Clarke said.
So instead of constantly building cash, it decided to put money back into the association by creating a training company called HFMA Learning Solutions, Clarke said. That caused expenses to bulge in certain areas while revenues leveled off or declined in other areas, he said.
Personnel and professional services costs climbed as the association added new jobs and hired outside advisers. It now has about 80 employees, Clarke said.
Accounts receivable also ballooned to a little more than $1 million from about $600,000 the previous year.
"Most of the receivables increase is our new training company, which sells services to hospitals," Clarke said. "Some hospitals are pretty slow payers."