MD Anderson records $102.4M operating loss in first 2 months of FY 2017

Kelly Gooch -

The University of Texas MD Anderson Cancer Center in Houston saw a significant loss in operating income in October.

MD Anderson recorded an operating loss of $60.9 million for the month, compared to an operating surplus of $11.5 million in the same period the year prior. For the first two months of fiscal year 2017,which began Sept. 1, MD Anderson's operating losses total $102.4 million.

MD Anderson's operating expenses in October were $368.8 million, a 7.7 percent increase from October 2015, according to the hospital's financial report. Total operating revenues in October were $307.9 million, down from $378.1 million in October 2015.

Additionally, total operating revenues for the first two months of FY 2017 were $630.8 million —$109.7 million below budget. That's a 9.1 percent decrease from the same period of FY 2016.

In August, MD Anderson officials attributed the institution's sagging financials to various factors, including a costly Epic EHR implementation as well as a shrinking pool of potential patients due to restricted insurance coverage.

MD Anderson President Ronald DePinho accepted responsibility for the cancer center's financial losses.

"Who is accountable for the financial performance? I take full responsibility for the challenges," Mr. DePinho said Nov. 15, addressing a faculty forum convened to discuss the institution's finances, according to The Cancer Letter.

In light of MD Anderson's financial picture, executives are urging faculty members to add clinical days and try to convince out-of-town patients to remain at the cancer center for the duration of their treatments, the report states. Other frugality measures, including eliminating overtime, instituting a hiring freeze, curbing catering, and turning holiday parties into potluck events, have also been discussed.

Still, MD Anderson officials remain optimistic, contending that the cancer center's long-term financial outlook is strong. 

"MD Anderson has reserves and non-operating revenues that give us the opportunity to adjust our operating revenue and expense structure without making overly drastic changes," Dan Fontaine, MD Anderson executive vice president for administration told The Cancer Letter. "We are implementing action plans now to ensure we can address short-term losses and maintain our focus on our mission."

"MD Anderson is a magnificent institution with outstanding leadership," says Scott Becker, publisher of Becker's Healthcare. "In the long run, it will thrive."


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