The trade group that represents for-profit hospitals turned things around financially last year as it worked to turn around Medicare payment policies unfavorable to its members.
The Federation of American Health Systems posted a $262,529 profit in 1998, compared with a $99,540 loss in 1997, according to the group's latest annual Form 990 tax filing with the Internal Revenue Service.
The federation filed its form, which is available to the public, with the IRS early last month. MODERN HEALTHCARE reviewed a copy last week.
Laura Thevenot, the federation's executive vice president and chief operating officer, attributed the turnaround to the strength of the 1,700-member organization's investment income. In 1997, the group reported no interest on savings or temporary cash investments compared with $97,429 last year.
The federation's dues revenues rose 2.9% last year to $4.5 million from $4.3 million in 1997.
Its revenues from all sources rose 2% last year to $6.8 million from $6.4 million the year before.
The federation's total expenses rose 1.5% last year to $6.6 million from $6.5 million.
The three top executives at the federation earned less in total compensation last year than they did the year before, according to the tax filing.
Thomas Scully, the federation's president and chief executive officer, earned $575,442 in total compensation in 1998, down nearly 24% from his 1997 total compensation of $755,104. Total compensation includes salary, contributions to employee benefits programs and expense account allowances.
The drop was caused by the inclusion of a one-time annuity Scully received in 1997, Thevenot said. Scully's base salary remains $375,000, she said.
The federation's tax filing also noted as a liability $1.6 million in deferred compensation. Thevenot said that reflects pension benefits and retirement accounts for senior federation executives and all the group's 20 employees.
The federation's top executives have spent many long hours during the past two years lobbying for relief from the Medicare cuts mandated by the Balanced Budget Act of 1997, and their efforts are on the verge of paying off (See story, p. 3).
"I think we've moved the ball substantially this year, certainly from where we started," Thevenot said.