“As far as I'm concerned, it shows our costs are under control, and that our revenues have increased,” said John Bluford, AHA board chairman and also president and CEO of Truman Medical Centers in Kansas City, Mo.
The recovery in investment revenue had a direct impact on net income, stressed John Evans, the AHA's senior vice president and chief financial officer. The group recorded a $3.8 million rise in net income to $6.5 million in 2010. That's up from $2.7 million in 2009 and based on total revenue rising by 9.2%, or about $9.1 million. Total revenue grew to $107.8 million in 2010 from $98.7 million in 2009. Evans added that operating income increased by $2.8 million.
Evans said the investments outperformed projections. Given last year's deficit, investment income soared by 258.7%. Evans credited a diversified portfolio for the performance.
“Sometimes you're surprised; sometimes that's just how the market goes,” he said.
Healthcare reform continued to affect the balance sheet this year, Bluford said. While the AHA spent $1.7 million in lobbying last year, that number grew by nearly 40% in 2010, as the group spent $2.4 million. Bluford singled out ads taken out in publications thanking congressmen as part of that spending.
The AHA increased staffing this year, Evans said, as the agency reported 510 employees total, up from 502 a year ago. The year prior saw layoffs, including Senior Vice President James Bentley and Vice President of Strategic Communications Richard Wade. Overall, salaries and compensation dropped by 5.4%, from $48.3 million to $45.6 million. Evans said that reflected a change to the executive benefits program.
Membership dues saw a slight uptick at 1.2%, rising from $73.6 million last year to $74.5 million. A hospital's membership fee is based on a sliding scale and reflects its financial performance. This year, the AHA capped its maximum increase in annual dues to 1%, Evans said.
Bluford credited AHA President and CEO Richard Umbdenstock's performance and said his compensation reflected the confidence the board has in him.
Umbdenstock earned about $1.1 million in both 2010 and 2009.
The association's fiscal year starts Oct. 1.