University of Michigan regents approved the fiscal 2013 operating budget for the UM Hospitals and Health Centers, in a unanimous vote taken at their June 21, 2012 meeting. Doug Strong, CEO of the UMHHC, made a presentation on the FY 2012 budget – which ends June 30, 2012 – as well as on the budget plan for FY 2013. He described the organization as financially healthy, though stressed by the same economic pressures as similar entities.
For the current fiscal year 2012, revenues are expected to reach $2.24 billion, with an 0.5% negative operating margin of $11.3 million. However, that’s better than the anticipated loss of $23.5 million that had been budgeted for the year, Strong said. The loss is due in large part to costs related to the new C.S. Mott Children’s and Von Voigtlander Women’s Hospitals, which opened in December of 2011, as well as to the expansion of an adult emergency department and a new system for patient records and billing.
Strong noted that the system’s operating margins fluctuate historically, and downturns are tied to the opening of new facilities – like the Cancer Center in the mid-1990s, and the Cardiovascular Center in 2007 – or to changes in payment rates, such as Medicare and Medicaid reimbursements.
Revenues are projected to increase to $2.39 billion in FY 2013 – a 6.7% increase. An operating gain of $10.8 million is anticipated.
This brief was filed from the Michigan Union Ballroom on the Ann Arbor campus, where regents held their June meeting.