Henry Ford Health grapples with $36M operating loss in Q1

Detroit-based Henry Ford Health System ended the first quarter of 2020 with an operating loss and lower revenue than in the same period a year earlier, according to recently released financial documents

In the first quarter of 2020, Henry Ford Health reported revenues of $1.52 billion, down slightly from $1.54 billion in the same period a year earlier. The drop in revenue was attributable to the deferral or cancelation of elective procedures due to the COVID-19 pandemic, the health system said. 

Henry Ford Health's expenses climbed 3.7 percent year over year to $1.56 billion in the first quarter of this year. Expenses related to supplies increased 8.3 percent year over year due in part to supplies related to COVID-19. 

The health system ended the first quarter of 2020 with an operating loss of $36.2 million, compared to operating income of $39.4 million in the same period last year. 

After factoring in nonoperating items, Henry Ford Health reported a net loss of $234.5 million in the first quarter of this year. In the first quarter of 2019, the health system recorded net income of $120.4 million. 

"The system's operations have been adversely impacted by the severity of the COVID-19 crisis resulting from disruptions in supply chains, staffing shortages in our hospitals, increased cost to treat patients, and reduced patient revenues due to the deferral or cancellation of non-time-sensitive procedures," Henry Ford management said. "The duration and severity of the pandemic may adversely impact the remainder of 2020 financial performance." 

To help offset financial damage from the COVID-19 pandemic, Henry Ford Health has received $403 million in Medicare advance payments, which must be repaid. It also received a $78 million grant under the Coronavirus Aid, Relief and Economic Security Act and $2.5 million from the state of Michigan. 

More articles on healthcare finance:
Mayo Clinic's operating income drops 88% in Q1
15 hospitals have closed this year — here's why
CMS offers hospitals $1.9B in incentive payments

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