CARES Act money puts Beaumont in better financial position entering 2021
Although surgeries, diagnostic services and emergency center visits are recovering at Beaumont Health, they have not returned to pre-pandemic levels whose revenue declines were offset last year because of federal assistance.
The Southfield-based health system and the largest in Michigan, however, is sitting better than in 2019: It ended the year with $3.49 billion in cash and investments, a 54% increase, and with more than 307 days of unrestricted cash, up 58%, because of $505 million in Medicare Advanced Payments, CARES Act payments and deferred payroll taxes in the year.
Beaumont on Monday said its operating revenue fell 2.6% year-over-year in 2020 to $4.58 billion as the eight-hospital organization had year-over-year volume decreases in inpatient discharges, observations, births, emergency visits, surgeries and physician encounters. The nonprofit's net income fell almost 16% to $329.6 million.
“The effects of the pandemic are expected to continue into 2021 as Beaumont has cared for more COVID-19 patients than any other health care system in Michigan," John Kerndl, chief financial officer, said in a statement. "The Beaumont team remains focused on leading through the COVID-19 pandemic and providing low-cost, high-quality care as demonstrated by our designation of 19 national rankings by U.S. News and World Report."
Cases of the novel coronavirus overwhelmed emergency rooms and intensive care units last spring. Meanwhile, hospitals hemorrhaged cash, laid off thousands of health professionals and eliminated hundreds of jobs as governments paused elective procedures, patients decreased their visits and personal protective equipment costs increased.
Beaumont's net operating margins fell to 3.9% last year from 4.2% in 2019. It reported a $176.6 million net operating income, a 10% decrease. In November, the health system announced $140 million in compensation enhancements, including increasing its minimum wage to $15 per hour.
Congress last year passed the Coronavirus Aid, Relief, and Economic Security Act, a $2.2 trillion economic stimulus that provided $178 billion to hospitals and health-care providers on the front lines. The Biden administration currently is negotiating with Congress for another major relief package.
Beaumont received $387 million in CARES Act funding last year. Its non-operating income for 2020 totaled $162.7 million, a 21% decrease compared to 2019. Its total debt declined 3.3% to $1.47 billion.
This year, Beaumont continues to be a leader in COVID-19 vaccination efforts, having administered 100,000 doses to date. It also is handling testing for 60 Michigan employers and has stored up additional personal protective equipment for its employees.