The Detroit Medical Center’s Harper University Hospital is leading a growth spurt for Tenet Healthcare, the DMC’s for-profit owner, it was announced Tuesday.
The 80-hospital chain’s second-quarter earnings grew by 13 percent over earnings during the second quarter last year, Tenet Healthcare President and CEO Trevor Fetter said during a Tuesday morning conference call with investors.
Fetter attributed the growth partly to the federal Affordable Care Act, which added tens of thousands of people to the health insurance and Medicaid rolls this year. But he also credited the company’s long-term strategies, which include substantial expansion of Tenet’s outpatient network and investment in advanced clinical systems, among other things.
“For example, last week we cut the ribbon to open the new Heart Hospital at Detroit Medical Center,” Fetter said. “This new service-line specific hospital is attached to our Harper University Hospital — Harper, by the way, led our entire company in volume growth in Q2.”
The six-story, 215,000-square-foot Heart Hospital has six cardiac catheterization labs, four new operating rooms and 25 recovery bays, along with clinics specializing in heart valves, heart failure and atrial fibrillation. Hospital officials hope the facility will move the DMC to the head of Metro Detroit’s crowded hospital market, where U.S. News & World Report recently ranked the DMC fourth in cardiac care.
The Heart Hospital fulfills, in part, community investment commitments that were part of the deal when the DMC was acquired in 2011 by the for-profit hospital chain Vanguard Health Systems, Inc. Tennessee-based Vanguard promised it would spend $500 million to construct new facilities over five years, plus $350 million in routine capital spending over the same period. Those commitments were part of the deal when Tenet acquired Vanguard, including the DMC, last October.
Fetter also noted investments at the DMC’s Sinai-Grace Hospital and heaped praise on Detroit Mayor Mike Duggan and other city leaders for Detroit’s economic recovery.
“In northwest Detroit, we opened a new emergency department in Sinai-Grace Hospital a few months ago. It was the largest investment in that sector of the city in over a decade,” Fetter said. “Our inpatient admissions at Sinai Grace grew by 6 percent.
“I’m confident that we have a bright future in Detroit, and that the return on the investments that we’re making will be strong. The mayor and the civic and business leaders in Detroit are doing great at turning the city around and I’m proud that Tenet is the largest employer in the city.”
Fetter said Tenet embraced the Affordable Care Act early on, hosting about 350 enrollment fairs at Tenet hospitals across the nation. The events resulted in at least 16,000 people purchasing health exchange policies, and “tens of thousands” more enrolling for Medicaid in states, like Michigan, where lawmakers expanded the program.
More than 10,000 people have signed up for expanded Medicaid at DMC hospitals, according to Conrad Mallett Jr., chief administrative officer for the DMC. Statewide more than 330,000 Michigan residents have enrolled in the Healthy Michigan Plan, Michigan’s expanded Medicaid program, including about 160,000 in Wayne County.
“The numbers (of newly insured patients) at Detroit Medical Center are very, very significant,” Mallett said.
According to Mallett, the vast majority of the DMC’s newly insured patients are not new to the health system. They are patients who’ve been seen in DMC emergency departments in the past, but without health insurance. The Medicaid expansion could reduce uncompensated care provided by the DMC from 9 percent in 2013 to 5 percent this year, Mallett said.
“It’s a very significant change of the percentage of insured persons coming into our emergency departments,” Mallett said. “It’s very heartening.”