Federal COVID-19 grant keeps Henry Ford profitable

The latest financial documents from the Henry Ford Health System show that it continues to rely on federal COVID-19 stimulus grants to maintain profitability as the system is struggling to cope with increasing personnel and supply costs.

Without the stimulus fund, in the nine months ending September 30, the Detroit-based system would lose 14 million U.S. dollars, operating income of 5.1 billion U.S. dollars, and a loss rate of 0.3%. Without the help of the federal government, Henry Ford’s revenue for the comparable period in 2020 was 4.8 billion U.S. dollars, and the operating loss was 96 million U.S. dollars, which is only a small part of it, with a loss rate of 2.1%.

Including funds, the system’s operating income during 2021 will be 6.5 million U.S. dollars and during 2020 it will be 264 million U.S. dollars. Henry Ford received nearly 360 million U.S. dollars in relief funds during 2020, and this year it was 21 million U.S. dollars.

Even some non-profit systems have Although the pandemic continues, it is still profitableHenry Ford went through a particularly difficult period to cope with the resulting surge in staffing and supply costs.system Recently stated that it would hire 500 nurses In the next few years, from the Philippines to help solve its ongoing shortage of care. In September, Henry Ford 120 beds offline In its five hospitals, because it does not have enough people to staff them. A spokesperson said that at least some of them have been reopened, but could not provide exact figures.

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Henry Ford’s latest release shows that wages, wages and welfare expenditures-the largest category to date, accounting for 43% of expenditures-have increased by 8% year-on-year. The system stated that this was due to the introduction of temporary employees and the increase of the minimum wage to $15 per hour.

Henry Ford also invested more in wage programs designed to address the competitive labor market. Henry Ford’s Chief Financial Officer Robin Damschroder said in a statement that labor shortages have forced the system to participate in retention, compliance with schedules and other additional costs to ensure that it has a role in key roles such as nurses, technicians and customer service, environmental services, etc. Sufficient staffing and catering workers.

Henry Ford’s supply expenses increased by 18% year-on-year. Damschroder said that the increase in COVID cases in 2021 is the biggest contributor, including the continued demand for pandemic-related supplies. The return of elective surgery also played a role. One thing is not an important factor: the disruption of the global supply chain that caused prices to rise elsewhere. Henry Ford said that this is not a big problem for the system, but it is preparing for price increases, shortages and delays in the near future.

Another expense that has increased sharply during 2021 is the expense that Henry Ford’s health plan pays for member care. This line item surged nearly 15% during 2021. Henry Ford said that pent-up demand for outpatient and professional services accounted for more than half of the increase. The rest are costs related to Medicare Advantage and Medicaid membership, as well as costs related to COVID-19 treatment, testing, and vaccines. Darm Schroeder said that the health plan has so far spent $100 million on COVID treatment and testing.

In the nine months ended September 30, Henry Ford’s revenue increased by less than half of the expense ratio, and only increased by 4.7% year-on-year. Among them, the net income of patient services increased by 18.5%, which is due to the increase in the number reflecting the recovery from the decline in the number caused by the 2020 pandemic. The volume of outpatient surgery increased by 29.4% year-on-year, and the volume of inpatient surgery increased by 10%. During 2021, the number of emergency room visits increased by 7% and the number of discharged patients increased by 4.2%. At the same time, virtual visits dropped by nearly 18%.

Henry Ford wrote in his financial report: “New mutations in the virus and low levels of consumer confidence may continue to affect the revenue of the entire system in 2021.”