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UM Hospitals projects higher financial results for 2014

The University of Michigan Hospitals and Health Centers is projecting slightly higher financial results for fiscal 2014 ending June 30, with $17 million in operating income, a 0.7% margin, on revenue of $2.52 billion, UM Board of Regents were told today.

T. Anthony Denton, COO of UM Hospitals, credited the financial performance to patient volume increases and successful strategies implemented to adapt to the Affordable Care Act and other private market changes.

After the regents heard the details of UM Hospitals' performance, the board voted to approve the health system's budget.

While many hospital systems in Southeast Michigan saw stagnant or declining admissions, at UM patient care discharges and obstetric cases grew 5.1% and patient days increased by 3.8% for the adult, children's and women's hospitals, Denton said.

“We are going against the grain in terms of discharges,” said Paul Castillo, CFO of UM Health System, who said the hospital's rate of referrals from around the state has kept the discharge rate higher than average.

Denton said UM Hospitals also have seen a growth in surgical cases, with 700 additional surgical cases so far through May, he said. Denton also presented regents with a fiscal 2015 budget that calls for a 3% operating margin, or $80 million in operating income, on projected revenue of $2.66 billion.

On Friday, Denton will assume the role of acting CEO of UM Hospitals and Health Centers. Current CEO Doug Strong will become interim executive vice president and CFO for the University of Michigan, replacing Tim Slottow, who is leaving for the University of Phoenix.

On June 7, Denton said UM Hospitals successfully installed the Epic Corp.'s inpatient electronic health record. Last year, the outpatient electronic health record was installed.

“We had a lot of positive feedback from doctors,” Castillo said. “They said it was one of the smoothest installations and showing good results.”

Next month, Castillo said U-M will open the Northville Health Center with 101 examination rooms and some inpatient beds.

“We are running out of room” at UM hospitals, he said.

Denton said UM Hospitals is growing through a combination of affiliation with competing hospitals and construction of new facilties.

Last year, UM Health System signed an affiliation agreement with MidMichigan Health in Midland. Talks with Allegiance Health in Jackson are continuing, Castillo said.

“We are going through due diligence” on the Allegiance affiliation, Castillo said. “We hope to complete (The Allegiance affiliation) later this summer or early fall.”

"UM Hospitals projects higher financial results for 2014" originally appeared on the website of Crain's Detroit Business.

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