Despite the ongoing COVID-19 pandemic and diminished patient volume, nearly $800 million of federal COVID-19 stimulus money helped to make 2020 a profitable year for six-hospital Henry Ford Health System and eight-hospital Beaumont Health, according to the two Michigan health systems' financial statements.
In 2020, Henry Ford's net operating income increased 63% to $225.6 million from $138.8 million in 2019. This happened as net patient revenue declined 6.3% to $3.67 billion last year, a $247 million decline, from $3.9 billion in 2019, according to Henry Ford's financial statement, released to Crain's earlier this week.
With $397 million in COVID-19 stimulus dollars, Henry Ford posted a 3.5% operating margin in 2020, but without the federal grants, the system would have posted a -2.6% margin.
"The pandemic tested us in many significant ways, especially considering that the city of Detroit was among the cities hardest hit in the first surge," said Wright Lassiter III, Henry Ford's president and CEO, in a statement. "Through a prudent and balanced strategy, we were able to maintain our community commitment, and position ourselves for future growth in 2021 and beyond."
Beaumont also had a strong finish in the second half of the 2020 pandemic year, posting net operating income of $176.6 million, a $19.7 million decrease from 2019 when the Southfield-based system posted operating income of $196.3 million.
Hit hardest by COVID-19 than any other Michigan health system, Beaumont's operating margin dropped in 2020 to 3.9% from 4.2% in 2019. Beaumont's annual goal is to reach a 4% or higher operating margin.
In a statement, Beaumont said despite caring for more patients than other health systems in Michigan, "we are in good shape" from a financial perspective, said Diane Roth, Beaumont's interim CFO.
"We are proud of our team's efforts to navigate through a very challenging 2020 and we know the pandemic will continue to affect Beaumont's financials this year," Roth said. "We remain focused on providing high-quality, low cost care."
Boosting the financial condition of all health systems, the federal Coronavirus Aid, Relief and Economic Security Act of 2020 provided $178 billion to hospitals and health care providers. Beaumont received $387 million of the CARES Act funding.