Friday, November 15, 2019
Beaumont Health’s net income increased to $258.7 million through the third quarter of 2019, an increase of $132.2 million for the same period in 2018. The organization saw operating revenues rise to $3.49 billion, a $103.4 million increase over the $3.39 billion reported in the third quarter of 2018.
Net operating income for the first nine months of 2019 was $127.8 million (3.7% operating margin), a $2.6 million decrease from 2018’s result of $130.3 million (3.8 % operating margin).
“Our total operating expenses rose 3.6%, or $116.4 million, compared to the same period last year. This is because staffing and benefits expenses rose due to insourcing and planned salary adjustments,” Beaumont Health Chief Financial Officer John Kerndl said.
Non-operating gains through the third quarter were $130.9 million compared to a non-operating loss of $3.9 million in the same period last year.
“Strong investments drove our non-operating gains, but market volatility and uncertainty could affect future results,” Kerndl added.
The company’s treasury indicators remained strong, as cash and investments were $2.0 billion at September 30, 2019 compared to $1.9 billion on September 30, 2018. Unrestricted days cash on hand was 174.1 days at September 30, 2019, as compared to 162.3 days on September 30, 2018. Total debt at September 30, 2019 was $1.53 billion, compared to the September 30, 2018 balance of $1.59 billion.
Through the first three quarters, Beaumont experienced a year-over-year volume increase in inpatient discharges, observations, deliveries, emergency visits and physician encounters, but volumes for surgeries followed market trends and slightly decreased, year-over-year, compared to the same period last year.
“Although there are some headwinds, including changes to Michigan’s auto insurance laws, we remain focused on the future. We invested in our people through a planned salary increase in October. And, we have positioned ourselves for future growth by investing in outpatient and urgent care centers and remain committed to becoming the nation’s leader in patient and family-centered care. Three of our hospitals have achieved Magnet status, and our five other hospitals are on the path to achieve the prestigious nursing designation. We are also completing the due diligence process of our plan to make Akron, Ohio-based Summa Health a subsidiary of Beaumont and allow us to serve patients beyond Michigan,” Kerndl said.
In addition, as the health care industry transitions to managing populations of people, Beaumont will continue to support the strong growth of the Beaumont Accountable Care Organization (ACO), a physician and health system partnership. The Beaumont ACO is the top-performing ACO in Michigan and the fifth best in the country, according to the Centers for Medicare and Medicaid Services. The ACO generated $45.1 million in gross savings for contract year 2018.