University of Michigan Hospitals and Health Centers in the black for 11th straight year
ANN ARBOR, MI – The University of Michigan Hospitals and Health Centers have finished fiscal year 2007 with a positive operating margin, marking the 11th straight year in the black.
The operating margin was 3.9 percent ($61.7 million) on revenues of $1.57 billion. Hospital leaders presented the information to the U-M Board of Regents today.
“The strong year that we’ve had financially is a reflection the efforts of our faculty and staff to remain fiscally responsible, even as we are improving the quality of care we deliver to our patients. The health care environment continues to be a difficult one, but our team has managed the unpredictability with great skill,” says Robert Kelch, M.D., U-M’s executive vice president for medical affairs and CEO of the U-M Health System.
As a nonprofit institution, the hospital uses its operating margin to reinvest in facilities and resources that ensure the highest quality of care for its growing patient population. Because UMHHC is nonprofit, positive finances are known as an operating margin rather than a profit.
The Regents also approved the budget for fiscal year 2008, which includes an operating margin goal of 3 percent ($52 million) on revenues of $1.7 billion. One of the goals and targets outlined in the UMHS Strategic Direction is that the Hospitals and Health Centers achieve an average operating margin of at least 3 percent per year during the next 10 years.
“We have laid out an ambitious goal, but it is one that we think will secure the financial future of the Hospitals and Health Centers and will ensure that we can provide the best care to our patients for years to come,” says Tony Denton, senior associate director and chief operating officer of UMHHC.
“We are in a very strong position fiscally, though the future will provide tremendous challenges – especially because of the uncertainty of the Michigan economy and national health care policy,” adds Dave Morlock, senior associate director and chief financial officer of UMHHC.
The three U-M hospitals – University Hospital, C.S. Mott Children’s Hospital, and Women’s Hospital – had 48,021 patient discharges and observation cases in fiscal 2007, up from 47,103 in the previous year. In addition, 42,259 surgical cases, both inpatient and outpatient, took place in U-M operating rooms. Meanwhile, the many U-M outpatient clinics and health centers in three counties handled more than 1.6 million visits.
One goal for the new fiscal year is to increase capacity to meet the growing needs of patients. The recent opening of the U-M Cardiovascular Center led to a net increase of 37 beds, and other expansions and changes will combine with the CVC numbers for a total of 73 more beds in a year and a half, says Doug Strong, director and chief executive officer of the Hospitals and Health Centers. A new C.S. Mott Children’s Hospital and Women’s Hospital also is under construction and is scheduled to open in 2011.
“Increases in capacity, along with ongoing efforts to improve quality and efficiency throughout the Hospitals and Health Centers, will help us remain the hospital of choice for many patients in Michigan and beyond the state’s borders,” Strong says.
UMHHC’s financial stability also is reflected in its excellent bond ratings with both Moody’s Investors Service Inc. and Standard & Poor’s. This bond rating is among the highest in health care systems across the industry and reflects a strong and sustainable financial position.
Written by Katie Gazella
This news content was configured by WebWire editorial staff. Linking is permitted.
News Release Distribution and Press Release Distribution Services Provided by WebWire.