Dive Brief:
- Despite Medicare reimbursement cuts and potential changes to Michigan's lucrative auto no-fault medical payments, Henry Ford Health System and Beaumont Health both saw financial success in 2014.
- Henry Ford bounced back from a $12-million net income loss in 2013 to $27.8 million in net income in 2014. Beaumont saw consolidated revenue for its eight hospitals increase by 5% and its net income by $40 million.
- Medicaid expansion was a major contributor to both systems' success, according to local experts.
Dive Insight:
Marianne Udow-Phillips, director at the Center for Healthcare Research and Transformation, told Crain's Detroit Business that Michigan's lower per-patient costs puts them in a good position to deal with reimbursement cuts or other financial challenges this year. "Michigan has lower costs than the two other states we studied (Indiana and Wisconsin)," Udow-Phillips said. "The [Michigan] health systems will become more profitable as Medicaid expansion" takes hold in 2015.
Beaumont CFO John Keuten said that Healthy Michigan Medicaid expansion has been a major contributor to the system's financial success, adding $30 million in net revenue during the nine months it was in effect last year.
The Affordable Care Act is likely here to stay, and a lot of hospitals are beginning to see financial success due to Medicaid expansion, at least in part. If you're in a non-expansion state, you might want to work with your state hospital association to persuade lawmakers to reconsider.