Novant experiences slight dip in first-quarter excess revenue

Novant Health Inc. began its fiscal 2026 with a 6% decline in first quarter excess revenue due primarily to a reduced amount of investment income received during the period.

Novant reported $107.8 million in excess revenue, compared with $114.7 million a year ago.

Excess revenue in a not-for-profit organization, such as Novant, equates to profit in a for-profit business, while the deficit equates to a loss.

The Winston-Salem not-for-profit healthcare system continues to benefit in revenue from its major hospital expansion into South Carolina with Hilton Head Hospital, Coastal Carolina Hospital and East Cooper Medical Center.

On Monday, Novant reported that Community Hospital of Stokes and about 200 employees had officially joined the system. Novant has signed a 30-year lease with the Stokes County Board of Commissioners to operate the Danbury hospital with an option for renewal for an additional 15 years.

Core operating income rose 213.4% to $3.09 billion.

The breakdown was $2.56 billion in net patient-service revenues, along with $529.8 million listed as "other revenue."

Novant said the increase in patient-services revenue came mostly from payments related to the state's Healthcare Access and Stabilization Program, known by the acronym HASP.

HASP payments serve as the lucrative carrot to encourage the state's healthcare systems and hospitals to support Medicaid expansion and the medical debt relief initiative. Every N.C. hospital joined the initiative by August 2024.

The system also continues to mention increases in patient volumes and pharmacy sales.

Expenses were at just under $3 billion, an increase of 13.3% related mostly to HASP-related expenses, higher medical supplies costs and other expenses related to increased patient volume.

Salaries and employee benefits rose 12.9% to $1.52 billion, primarily from increases in employees' pay and merit increases.

Supplies and equipment expenses climbed 14.1% to $1.33 billion.

Meanwhile, investment income was at $16.5 million, compared with $36.6 million a year ago.

Not-for-profit hospitals, such as Novant, Atrium Health Wake Forest Baptist and Cone Health, depend on investment income to boost their bottom lines and help pay for capital investments.

Investment income volatility in the stock market has been expected amid the uncertainty of the Trump administration's tariffs strategies.

Novant spent $277.7 million during the quarter on capital investments, compared with $185.1 million a year ago. Novant recently announced construction beginning on its community hospital in the Greenville, S.C., market.

Novant's report was listed at the Municipal Securities Rulemaking Board's website, www.emma.msrb.org.

The reports are aimed primarily at bondholders and ratings agencies, and typically are submitted about two months after the end of a quarter.

Novant has more than 40,000 employees, of which 8,145 are in Forsyth County as one of the Triad's largest employers. It has a major Charlotte and Wilmington presence and a budding central and coastal S.C. market.

Novant operates 19 hospitals, including Forsyth, Clemmons, Kernersville and Thomasville medical centers and Medical Park Hospital in Winston-Salem.

In April, Novant gained N.C. health regulators' approval to open a community hospital in Monroe, one of the state's largest suburban communities.

Novant plans to spend $346.1 million on a 32-bed hospital. Wesley Chapel Medical Center is projected to open in 2030.

Also in April, state health regulators approved Novant opening a 34-bed Asheville Medical Center. The $322.7 million hospital is slated to open in 2030.

Copyright 2026 Tribune Content Agency. All Rights Reserved.