Michigan Medicine reports positive financial performance for fiscal year 2021
Despite challenges presented by the ongoing COVID-19 crisis and a vaccine rollout, Michigan Medicine reported projected positive fiscal year-end results on Thursday, with an anticipated 6.5 percent ($339.8 million) operating margin on forecasted operating revenues of $5.2 billion.
The results include fiscal 2021 performance from U-M Health, the organization’s clinical branch that includes five hospitals, 125 clinics and the U-M Medical Group.
David C. Miller, M.D., M.P.H., presented the projected results for the fiscal year that ends June 30, along with the fiscal 2022 plan, to the U-M Board of Regents during its regular meeting.
“These results demonstrate our relentless focus on our core missions despite the challenges presented by the pandemic,” said Miller, who is president of U-M Health and executive vice dean for clinical affairs. “We continued to care for all patients, including those with COVID-19, while preserving the highest standards of quality and safety for both our patients and staff.”
Marschall S. Runge, M.D., Ph.D., expressed gratitude to Michigan Medicine employees who have successfully managed the ongoing COVID-19 pandemic.
“Several pandemic surges strained our teams and our vaccine rollout was hampered by supply constraints,” said Runge, who is CEO of Michigan Medicine, dean of the U-M Medical School and executive vice president for medical affairs.
“But through it all the people of Michigan Medicine were resilient, stepping up to the task and focused on our vision of being the health care provider of choice in the state of Michigan.”
Miller said Michigan Medicine successfully worked to efficiently use capacity for surges of COVID-19 patients while still balancing the needs of non-COVID-19 patients.
“We prioritized teamwork, access, safety, quality and experience for our patients and employees. We are proud that we exceeded our initial financial targets for fiscal 2021,” Miller said.
The regents also approved a budget that sets Michigan Medicine financial performance targets for the fiscal year that begins July 1. The fiscal year 2022 plan aims for a 4.3 percent operating margin on revenues of $5.5 billion.
The fiscal 2021 financial projection puts U-M Health back on track to expectations after losses contributed to the organization missing its fiscal 2020 target by $167 million.
In the beginning of the pandemic, the Michigan Medicine team was dealing with losses greater than $3 million per day in spring 2020.
“I want to recognize the faculty and staff for the remarkable teamwork that helped Michigan Medicine achieve such a successful turnaround — and deliver excellence in research, education and care to the people of our state,” said U-M President Mark Schlissel, M.D., Ph.D.
This financial performance allows Michigan Medicine to continue to invest in the future, including the resumption of construction of a new hospital, Miller said.
“We believe the new facility will increase access to Michigan Medicine specialists and modernize and transform inpatient and surgical care,” Miller said. “This expansion is key to our future growth and presents a tremendous benefit to not just those in our community but residents statewide who need access to our specialty care.”
The new 12-story hospital, called The Pavilion, will house 264 private rooms capable of converting to intensive care, a state of the art neurological and neurosurgical center, high-level specialty care services for cardiovascular and thoracic patients and advanced imaging services.
Construction resumed on the 690,000-gross-square-foot building this spring and it is expected to open in fall 2025.
Miller also stressed Michigan Medicine’s commitment to employees and plans to invest in teams and culture, including a comprehensive action plan through an Anti-Racism Oversight Committee.
“We believe that our plan is achievable because we can depend on the caring, dedication and teamwork of our faculty and staff. They demonstrated their commitment during a tremendous health care crisis and lived out our mission every day. We can accomplish this plan because of the extraordinary people that make up Michigan Medicine,” Miller said.