The University Record, July 23, 2001

Health System’s budget aims to maintain financial stability

By Mary Beth Reilly
Health System Public Relations

Gilbert S. Omenn, executive vice president for medical affairs, presented to the Regents July 19 a budget proposal aimed at continuing to improve health care and patient satisfaction while sustaining the Health System’s financial stability.

Health System staff will continue to find ways to accommodate growth of inpatient and outpatient services and increase efficiencies in a time of constrained payment for medical care, Omenn added.

“We have made good progress in the last year, through sustained efforts across the many hundreds of programs and activities that make up our complex enterprise,” Omenn said.

The hospitals and health centers are projected to finish the 2001 fiscal year with a positive operating margin of $11.6 million on revenues of $879 million, according to Omenn. For fiscal 2002, the Health System anticipates a continued increase in clinic visits to more than 1.5 million and a 2.1 percent increase in hospital admissions. Length of inpatient stay is projected to remain at 5.6 days. The forecast projects revenues of $947.4 million and expenses of $928.6 million, resulting in an $18.8 million operating margin.

“We have done well to stay in the black during each of the past several years, while many other academic and community hospitals were laying off large numbers of staff and still incurring big deficits,” Omenn said. “However, we cannot relax our efforts to achieve clinical redesign, supply chain savings and other budget improvements while staying focused on providing quality health care and offering the latest advances from research.”

The Health System continues its reputation for both strong financial performance and high-quality medical care, as shown by the Aa bond rating with Moody’s Investors Service and by recognition as one of America’s top hospital systems. Only approximately 10 percent of health systems enjoy the Aa bond rating. The Health System is the only one in Michigan to make the prestigious 15-hospital U.S. News and World Report Honor Roll.