Weighted by free care costs, Henry Ford earnings fall

Wed, 21 May 2008 06:59:54 -0400

Henry Ford Health System is actually one of the lucky ones--after all, the not-for-profit made $105.8 million on $3.47 billion in revenue during 2007. The thing is, the health system's earnings are down substantially from the previous year's showing, largely because its cost of providing free care nearly doubled. Health system officials said that rising free care costs were driven by job losses and related losses of employee benefits in Michigan.

Henry Ford's 2007 earnings took a dive from the $134.9 million it made in 2006, despite its admissions rising due both to increases at existing facilities and new inflows from two facilities it acquired. That's because the cost of providing care to the uninsured and uninsured climbed from $13.4 million in 2006 to $25.3 million last year. Meanwhile, bad debt write-offs were $47.5 million, up from $42.2 million in 2006.

To learn more about Henry Ford's financial picture:
- read this Detroit Free Press piece

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MI hospital defaults on bonds, discusses selloff

Wed, 09 Apr 2008 06:59:55 -0400

Things have gotten ugly for financial managers at North Oakland Medical Center. The 178-bed hospital, which is based in Pontiac, MI, defaulted on $38.5 million in bonds issued by the Pontiac Hospital Finance Authority. The hospital lost $13.4 million from operations in fiscal 2007, and had a meager 18 days cash on hand on Dec. 31, according to Standard & Poor's. The hospital missed a January 15 bond payment, which lowered its S&P rating on the series from B to D.

Executives say that they've been squeezed by their role as a safety-net hospital, which resulted in their spending $21 million in uncompensated care over the last three years. It hasn't helped that admissions have fallen from 7,600 in 2006 to a projected 5,000 this year.

Given these conditions, North Oakland execs are in talks to sell the facility to one of several local chains, including Henry Ford Health System, Trinity Health and William Beaumont Hospitals.

To learn more about the hospital's fate:
- read this Crain's Detroit Business piece (reg. req.)

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henry ford health system

Weighted by free care costs, Henry Ford earnings fall

MI hospital defaults on bonds, discusses selloff