Midland-based MyMichigan Health's operating income jumped 294% year over year to $51.3 million for the fiscal year ending June 30, one month before the health system acquired three underperforming hospitals, according to financial documents published Oct. 17.
Revenue increased 12% year over year to $1.49 billion while expenses grew by 9% to $1.45 billion. After accounting for nonoperating items, such as investment returns, MyMichigan reported a net income of $154.4 million in FY 2024, compared to a net loss of $7.8 million in FY 2023.
MyMichigan became a 12-hospital system on Aug. 1, when it acquired three Michigan hospitals from St. Louis-based Ascension for an undisclosed price. The hospitals include:
- MyMichigan Medical Center Saginaw (formerly Ascension St. Mary's of Saginaw)
- MyMichigan Medical Center Standish (formerly Ascension St. Mary's of Standish)
- MyMichigan Medical Center Tawa (formerly Ascension St. Joseph)
MyMichigan significantly improved its financial position before purchasing the three hospitals, which have been operating at losses for several years, MyMichigan CFO Mike Rose told Becker's.
"That obviously was of concern as we were contemplating this transaction, but as we dug into due diligence, we felt like there was a path of two to three years to return these facilities to profitability," Mr. Rose said. "We looked at the level of overhead within our organization versus what was being allocated in these facilities, and we think we can bring significant administrative savings."
Mr. Rose said MyMichigan recognizes the acquisition will put pressure on its margins over the next few years, but the health system believes the deal will be worth it in the long run afrer finalizing a recovery plan for the hospitals.
The acquisition strengthens MyMichigan's footpring in the region and will lead to more downstream referrals across various specialties.
"MyMichigan has invested heavily in surgical oncology specialties, including colorectal, breast, endocrine and thoracic," Mr. Rose said. "We need more covered lives for these programs to achieve full scale. These adjacent markets represent a 40% increase in our service area population."