ANN ARBOR, Mich. — Michigan Medicine reported positive fiscal year-end results today, with an anticipated 5.6 percent ($210 million) operating margin on budgeted operating revenues of $3.7 billion for the University of Michigan Health System.
Michigan Medicine’s University of Michigan Health System includes three hospitals, 125 clinics and the U-M Medical Group.
David Spahlinger, M.D., presented the positive projection of year-end results for fiscal 2017 along with the fiscal 2018 plan today to the U-M Board of Regents during its monthly meeting.
Michigan Medicine also saw strong patient volume in both clinics and hospitals, coupled with improved patient access and improved quality outcomes, all of which contributed to the projected operating margin, says Spahlinger, president of the University of Michigan Health System and executive vice dean for clinical affairs of the U-M Medical School.
“Our projected fiscal year 2017 results and the plan for fiscal year 2018 reflect our focus on improving quality and safety and reducing the cost of care,” says Spahlinger.
“But it’s the expertise and teamwork of our fantastic, dedicated faculty and staff that makes the difference.Our performance depends on the contributions of all of those who provide care for our patients across Michigan Medicine, including nurses, physical therapists, social workers, support staff and many more.”
Spahlinger cited projects that improved patient access in fiscal year 2017, including the addition of four incremental operating rooms in University Hospital, six new patient rooms in the C.S. Mott Children’s Hospital newborn intensive care unit, five new inpatient rooms in University Hospital and moving the Department of Psychiatry's Neuromodulation Program into University Hospital South.
Also today, the Regents approved a budget that sets Michigan Medicine financial performance targets for the fiscal year that begins July 1st.The fiscal 2018 plan aims for a 5.4 percent operating margin on revenues of $3.8 billion.
“These targets are aggressive but needed to fund our aspirations for the next five years and beyond,” Spahlinger says. “We are challenging ourselves to reach those goals and give us the ability to invest in our future.”
Michigan Medicine has embarked on additional projects to increase patient access, including a new health center in west Ann Arbor set to open in fall 2017 and the Brighton Center for Specialty Care set to open in 2018.
Spahlinger also reported on separate financial performance for UM Health, which represents Michigan Medicine affiliations. In fiscal year 2017, UM Health is anticipated to have an operating margin of 0.2 percent on $377 million.
For fiscal 2018, operating revenues of $413 million are expected to generate an operating margin of minus 0.3 percent. That negative margin reflects investments planned for the long-term financial health of UM Health.
About Michigan Medicine: At Michigan Medicine, we create the future of healthcare through the discovery of new knowledge for the benefit of patients and society; educate the next generation of physicians, health professionals and scientists; and serve the health needs of our citizens. We pursue excellence every day in our three hospitals, 125 clinics and home care operations that handle more than 2.1 million outpatient visits a year.The U-M Medical School is one of the nation's biomedical research powerhouses, with total research funding of more than $470 million.
More information is available at www.michiganmedicine.org