Henry Ford Health System Reports Continued Financial Growth

April 20, 2015

DETROIT - For the 12th consecutive year, Henry Ford Health System experienced positive revenue growth in 2014.

Henry Ford reported total revenues of $4.7 billion in 2014, an increase of $195 million, or 4 percent, from 2013.

Net patient service revenue increased $77 million or 4 percent in 2014 due to outpatient volume growth (outpatient facility visits were 83,289 or 3 percent over prior year levels) and growth in ancillary areas, such as pharmacy.

“Consistent with the improved economy, we continued to see yearly growth,” says Nancy Schlichting, CEO of Henry Ford Health System.

“Our positive financial performance is also the result of our work in the area of reducing inpatient admissions, the Affordable Care Act and in growth and cost savings initiatives,” says Schlichting.

Inpatient volume admissions were 2,074 or 2 percent below prior year levels, the result from continued work on reducing unnecessary re-admissions and the shift of care from inpatient to outpatient settings.

Health care premiums increased $97 million or 5 percent due to an increase in premium rates partially offset by a product mix change and slight (1 percent) membership decline.

“Specifically, the health plan division saw a shift in membership from the commercial fully insured HMO product to the self-insured product, consistent with expectations under the Affordable Care Act,” says Edward Chadwick, chief financial officer for Henry Ford Health System.

In addition, the Medicaid product line experienced a significant increase in membership (19 percent) due to Medicaid Expansion (“Healthy Michigan”) that went into effect in Michigan on April 1, 2014.

Henry Ford provided $317 million of uncompensated care in 2014, up slightly from $315 million the prior year.

“As a result of the ACA, the increase in uncompensated care has slowed due to fewer numbers of uninsured, specifically as the result of the establishment of the exchanges and the Health Michigan Medicaid expansion,” says Chadwick.

However, there remains a large number of uninsured, and many patients are finding that they have insurance coverage that has deductibles and copayments that are beyond their ability to pay. The organization’s loss on Medicaid grew in 2014 due to expanded number of covered individuals.

“Given its mission, Henry Ford also had substantial unreimbursed costs for health professional education, research and other community services,” says Chadwick.

Highlights for 2014 include:

  • In the fourth quarter, CEO Nancy Schlichting announced she would be retiring by the end of 2016. Simultaneously, she announced the appointment of Wright Lassiter III as the System’s President and incoming CEO. Lassiter is a seasoned CEO, most recently noted for the turnaround of Alameda Health System in Oakland, CA.
  • HAP has the “Highest Member Satisfaction among Commercial Health Plans in Michigan, Seven Years in a Row”**.
  • Henry Ford Health System hospitals were ranked nationally and regionally in 24 medical specialties by U.S. News and World Report’s annual Best Hospital survey.
  • Henry Ford Medical Group averaged 2,000 new medical records per month in its network of primary care clinics through “radical convenience” initiative that provides patient consults via “Call, Click or Come in.”
  • The Henry Ford Heart and Vascular Institute’s Structural Heart Program grew by 36 percent in two years with a number of major “firsts” including: first in world to perform Mitral Tricuspid Valve Replacement, first in U.S. to perform tricuspid valve implantation, and first in U.S. to use 3D images of valves.
  • Henry Ford Medical Group is the lowest cost Organized System of Care in Southeast Michigan and 4th lowest in the State in Blue Cross’s Physician Group Incentive Program.
  • HFMG’s participation in the Michigan Primary Care Transformation Center for Medicare and Medicaid Services (CMS) Demonstration project resulted in a 5 percent reduction in total costs and improved same day access.


** Health Alliance Plan of Michigan received the highest numerical score among commercial health plans in Michigan in the proprietary J.D. Power 2008-2014 U.S. Member Health Plan Studies.SM 2014 study based on 34,315 total member responses, measuring four plans in Michigan (excludes Medicare and Medicaid). Proprietary study results are based on experiences and perceptions of members surveyed December 2013 – January 2014. Your experiences may vary. Visit jdpower.com.

About Henry Ford Health System

Henry Ford Health System, one of the largest and most comprehensive integrated U.S. health care systems, is a national leader in clinical care, research and education. The system includes the 1,200-member Henry Ford Medical Group, five hospitals, Health Alliance Plan (a health insurance and wellness company), Henry Ford Physician Network, a 150-site ambulatory network and many other health-related entities throughout southeast Michigan, providing a full continuum of care. In 2014, Henry Ford provided $317 million in uncompensated care. The health system also is a major economic driver in Michigan and employs more than 23,000 employees. Henry Ford is a 2011 Malcolm Baldrige National Quality Award recipient. The health system is led by CEO Nancy Schlichting. To learn more, visit HenryFord.com

(313) 876-2882