Michigan Medicine shares expected positive financial results for fiscal year 2019
Michigan Medicine shared projected fiscal year-end results Thursday, with an anticipated 3.8 percent ($178 million) operating margin on forecasted operating revenues of $4.7 billion.
The financial results for Michigan Medicine include performance from the organization’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.
The positive news — which was shared with the board of regents on Thursday by David Spahlinger, M.D. — will help the organization reinvest in its people, programs and capital investments in the months and years ahead.
“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 U-M 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 health care provider of choice in the state of Michigan.”
Spahlinger said Michigan Medicine worked hard to manage costs and improve efficiencies in FY19, 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 FY19 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 almost 300,000-square feet 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 U-M’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 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.”