Iasis Healthcare, Franklin, Tenn., said its profits for its fourth quarter ended Sept. 30, were squeezed by startup costs at its new hospital in Mesa, Ariz., and bad-debt and physician-employment expenses. The privately held company reported net income of nearly $7.6 million for its fourth quarter, down almost a third from $11.1 million in the fourth quarter of fiscal 2006. Revenue increased by a fifth to $489.8 million. For the fiscal year, profits were up slightly to $41.6 million compared with $39.6 million in fiscal 2006. Revenue increased nearly 15% to $1.4 billion.
Iasis incurred $8.6 million in expenses in fiscal 2007, including $4.7 million in its fourth quarter, related to the opening of Mountain View Medical Center in Mesa. While bad debt was basically flat for the fiscal year, it increased a full point as a percentage of revenue comparing the fourth quarters, according to Iasis. Physician employment, mostly in the companys Utah market, drove an increase in labor costs, said W. Carl Whitmer, chief financial officer of Iasis. Employment of specialist physicians is expected to expand beyond Utah to the companys other markets, said David White, chairman and chief executive officer. As Ive said before, I think in the next five years, youre going to see a groundswell of that activity for all hospitals. I firmly believe that, White said during a conference call.
Iasis owns or leases 16 acute-care hospitals and one behavioral hospital in six states and operates a Medicaid and Medicare managed-care plan in Phoenix with more than 125,000 members. -- by Vince Galloro