University of Michigan
News for Faculty and Staff

February 25, 2017

U-M Health System reports strong financial results, growth

June 16, 2016

U-M Health System reports strong financial results, growth

The University of Michigan Health System reported positive fiscal year-end results Thursday, with an anticipated 4.2 percent ($129 million) operating margin on budgeted operating revenues of $3.1 billion for the U-M Hospitals, Health Centers and the Medical Group.

This financial performance helps position the university's clinical enterprise for continued investment in support of the Health System's goals to advance patient care, education and research.

Dr. David Spahlinger, president of U-M Hospitals, Health Centers and the Medical Group, presented the positive projection of year-end results for fiscal year 2016 along with the FY '17 plan to the Board of Regents.

Strong patient volume in both clinics and hospitals, along with improved patient access contributed to the strong financial performance, he said.

"We also credit high levels of engagement of physician faculty, nurses and support staff across all of UMHS' clinical programs and care locations to our continuing success. The teamwork of our expert, dedicated staff makes the difference," Spahlinger said.

He cited several capacity projects that have improved patient access in FY '16, including in the medical short stay unit, the emergency critical care center, an ambulatory diagnostic treatment unit and new specialty imaging capacity.

Regents approved a budget that sets a higher financial performance target for the fiscal year that begins July 1. The FY '17 plan aims for a 4.3 percent operating margin on revenues of $3.2 billion, based on further increases in patient activity and effective management to reduce the rate of expense growth.

UMHS has embarked on additional projects to increase patient access, including the planned opening of four new operating rooms in University Hospital, a new health center in west Ann Arbor set to open in fall 2017, and another health center in Brighton set to open in 2018.

"We are in a good position to meet our operating and financial goals for 2017, aligned with our long-term plan to continuously improve the financial strength of our clinical enterprise so we can invest in our missions of patient care, education and research," Spahlinger said.

UMHS Chief Financial Officer Paul Castillo said Health System leaders are continuing to improve the quality and safety of care while reducing costs and improving patient experience.

"We can be very proud of achieving our financial target. We plan to continue to focus on adding value while improving operational efficiencies in the coming year," Castillo said. "We are confident that we are prepared to navigate the pressures facing our industry, so that we can meet or exceed our projections."

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