ANN ARBOR, Mich. — Michigan Medicine shared projected fiscal year-end results today, with an anticipated 3.8 percent ($178 million) operating margin on forecasted operating revenues of $4.7 billion for the academic medical center of the University of Michigan.
The financial results for Michigan Medicine include performance from the University of Michigan Health System’s three hospitals, 125 clinics and the U-M Medical Group, as well as U-M Health, which represents Michigan Medicine’s affiliation with Metro Health in Grand Rapids.
David Spahlinger, M.D., presented the projection of positive year-end results for fiscal 2019, along with the fiscal 2020 plan, today to the U-M Board of Regents during its regular meeting.
“The year’s results reflect our activity growth and our steadfast focus on investments in safety, quality, access and efficiency,” said Spahlinger, executive vice dean for clinical affairs and president of the University of Michigan Health System.
“The results also demonstrate the commitment of our dedicated faculty and staff to providing excellent health care, improving our patients’ experiences and executing our long-term vision of being a healthcare provider of choice in the state of Michigan.”
Spahlinger said Michigan Medicine worked hard to manage costs and improve efficiencies in fiscal 2019, along with continued efforts in activating new capacity and relationships with affiliate partners.
“This was smart cost management. We added and managed additional patient volume efficiently and safely, while monitoring the cost of care,” Spahlinger said. “By examining our processes, we improved not only efficiency but also patient safety, through reduction of hospital acquired infections.”
Several initiatives in fiscal year 2019 helped to position the whole organization for success across all of its missions: patient care, education and research.
· In July 2018, Michigan Medicine and St. Joseph Mercy Health System opened a joint venture in Chelsea, Michigan at the new St. Joseph Mercy Chelsea Hospital.
· In September 2018, Michigan Medicine opened the nearly 300,000 square foot Brighton Center for Specialty Care, providing more than 50 adult and pediatric specialty services in Livingston County.
· In March 2019, Michigan Medicine signed an affiliation agreement with Sparrow Health System to expand access to specialty care for patients in the mid-Michigan region.
· Operated the first full year of business at the new West Ann Arbor Health Center Parkland Plaza in Scio Township, which houses 27 adult and pediatric primary and specialty care services.
· Michigan Medicine invested in its employees through the recent expansion of the University of Michigan’s parental leave programs, along with a planned increase in retirement benefits.
The Regents also approved a budget that sets Michigan Medicine financial performance targets for the fiscal year that begins July 1.The fiscal year 2020 plan aims for a 3.4 percent operating margin on revenues of $5 billion.
“No significant capacity enhancements are expected in fiscal 2020, so this plan is ambitious as we continue to deal with legislative, regulatory and industry pressures,” Spahlinger said. “But we are optimistic. We will continue to take proactive steps to reduce the cost of care as we improve the patient experience.”
Also approved by the Regents Thursday was a potential line of credit between the University of Michigan Health System and Metro Health, a member of U-M Health. Borrowing on this line of credit would be subject to approval from the executive vice president for medical affairs or his designee, for an amount not to exceed $125 million over a five-year period.
The internal line of credit may be used for facility improvements at Metro Health.
“This will give us the flexibility to allow for proper investments at Metro that will move us closer towards our long-term strategy of providing access to specialty care closer to home for west Michigan residents,” Spahlinger said.
About Michigan Medicine: At Michigan Medicine, we advance health to serve Michigan and the world. We pursue excellence every day in our three hospitals, 125 clinics and home care operations that handle more than 2.3 million outpatient visits a year.
Michigan Medicine includes the top ranked U-M Medical School and the University of Michigan Health System, which includes the C.S. Mott Children’s Hospital, Von Voigtlander Women’s Hospital, University Hospital, the Frankel Cardiovascular Center and the Comprehensive Cancer Center. Michigan Medicine’s adult hospitals were ranked no. 5 in the nation by U.S. News and World Report in 2018 and C.S. Mott Children’s Hospital was the only children’s hospital in Michigan nationally ranked in all 10 pediatric specialties analyzed by U.S. News and World Report for 2018-19.
The U- M Medical school ranked ninth in the nation in U.S. News and World Report’s Best Graduate Schools ranking in 2018, placing fifth in the country for training primary care physicians. 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