In a week when global financial markets took a nosedive, the American Hospital Association reported that a rebounding investment portfolio drove a 140.7% rise in the association's net income in its fiscal 2010.
Back in the game
AHA's numbers up as investments drive income
Improved performances in domestic equities, emerging markets and inflation hedges, association officials said, powered the surge in investments, swinging 258.7% to a $3.9 million gain in the year ended Sept. 30 from a $2.4 million loss the previous year.
The figures come courtesy of the AHA's Form 990 filed last week with the Internal Revenue Service. “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 president and CEO of Truman Medical Centers in Kansas City, Mo.
The recovery in investment revenue had a direct impact on net income, said 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 9.2%, to $107.8 million from $98.7 million. Operating income also bolstered the results, increasing about $3 million to $101.4 million.
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 nearly 40% in 2010, as the group spent $2.4 million.
That increase doesn't reflect anything special, as the spending represents a small portion of the AHA's total revenue, said Robert Louthian III, a healthcare attorney with McDermott Will & Emery in Washington. “Given the critical importance of healthcare reform, and the fact that AHA is one of the leading associations representing that industry, I don't think the increase in lobbying expenditures year over year is anything particularly unusual or unexpected,” he said.
Bluford praised the performance of AHA President and CEO Richard Umbdenstock, who earned $12,850 more in 2010. His overall compensation from the AHA and related organizations was almost $1.8 million.
The AHA reported 510 employees, up from 502 in 2009. A round of layoffs that year included Senior Vice President James Bentley and Vice President of Strategic Communications Richard Wade. Overall, salaries and compensation dropped 5.5%, 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, rising 1.2% to $74.5 million in 2010 from $73.6 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.
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