Detroit's burgeoning tech industry is bringing new jobs to the city and bolstering providers like Henry Ford Health System.
Unemployment in the city has dropped to the mid-single digits after reaching above 20% just two years ago. The city's job creation initiatives are having an effect on the local economy. “And these, I might add, are good-paying jobs; these are professional jobs,” Robert Riney, the system's chief operating officer, told investors Tuesday at the JP Morgan Healthcare Conference in San Francisco. “The city has rebuilt in a unique way.”
Henry Ford, too, is counting on new digital health and technological innovations to ensure its future. It is investing in areas such as telehealth and has “a lot of excitement as it relates to retail and consumerism,” Riney said.
The system's business is evenly split between its insurance and delivery arms. It expects to transition more care to the outpatient setting and has built a strong ambulatory care network, said Wright Lassiter, the system's president.
Executives painted a financial picture of the system that showed that it has recovered from an operating loss that they attributed to a costly implementation of an electronic health record platform from Epic Health Systems.
In its last earnings report, Henry Ford reported an operating surplus of $101.9 million on $3.8 billion in revenue, an operating margin of 2.7%, for the nine-month period ended Sept. 30.That compares to an operating surplus of $51.3 million on $3.5 billion during the same period in the previous year.
“We have now rebounded strongly,” said Edward Chadwick, Henry Ford's chief financial officer.
The system is also expecting to close two acquisitions in the next 30 to 60 days, which will add just under $1 billion in revenue. Henry Ford's insurance business, Health Alliance Plan, forged a deal in October to acquire HealthPlus of Michigan, another insurer. And in November, the system said it would acquire Jackson, Mich.-based Allegiance Health System.
Riney said Henry Ford expects that deal to be "a springboard to others.”