- Henry Ford Health System saw its net income drop in 2017, despite rising revenues compared to the previous year, according to recent financial documents.
- Revenue for the year totaled $6 billion, up 4.8% from 2016. Net patient service revenue grew 11% to $183.9 million due to increased outpatient volume, specialty pharmacy activities and a larger all payer case mix index.
- Net income, however, dropped to $203.7 million from $275.6 million the prior year when revenue totaled $5.7 billion. Overall performance was dampened somewhat by wage rate increases and Epic implementation costs at Allegiance Health Group and Affiliates, the report says.
The Detroit-based health system also reported an increase in investment income — to $95.8 million from $47.4 million in 2016. Henry Ford Health System acquired Allegiance, a 475-bed health system in Jackson, MI, in April 2016.
Spending on community benefits and uncompensated care also grew. Community benefit spend increased from $564 million to $614 million due primarily to higher volumes of unreimbursed Medicare and Medicaid costs.
“Consistent with expectations resulting from the Affordable Care Act, there were fewer patients without health insurance coverage due to expanded coverage through the subsidized health insurance exchanges and Michigan Medicaid expansion,” management said. “However, there has been a corresponding growth in Medicaid patient volume, where payment rates do not fully cover the cost of care. In addition, a large number of patients are finding that they now have insurance coverage with deductibles and copayments that are beyond their ability to pay.”
Health systems continue to struggle with smaller inpatient volumes, reimbursement cuts and high labor costs. Henry Ford Health System’s workforce costs increased 8.5% to $2.4 billion, from $2.2 billion in 2016.
Lifepoint Health reported net income of $112.9 million in 2017, down from $131.8 million the previous year. The system attributed the decline to a 2.7% drop in patient admissions. Meanwhile, Tenet posted a $704 million loss in net income last year versus $196 million in 2016.