Back in the game

AHA’S num­bers up as in­vest­ments drive in­come

Modern Healthcare - - The Week In Healthcare - Ashok Sel­vam

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. 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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