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Allan Baumgarten, a Minneapolis-based healthcare consultant who also publishes the Michigan Market Review, says to do so, it has to keep up with UM.
“Henry Ford wants to be seen as the premier destination for medical education, research and specialist patient care for the state and the region,” Baumgarten wrote in an email to Crain’s. “It sees its main competitor as the University of Michigan health system, which has spent more than a billion dollars replacing and expanding the Ann Arbor campus and is acquiring hospitals in the area. Lansing Henry Ford needed to make his facilities brighter, more polished, and more attractive to both patients, doctors and researchers, which could make for small investments and improvements. increase or it can break through the barrier.”
HFH chose to run at home. But times are tough.
The healthcare industry faces its first real recession during the COVID-19 pandemic. Many health systems are already supported in 2020 and 2021 thanks to the government’s massive stimulus and relief investment, helping to fill the financial gap caused by skyrocketing care costs caused by overcrowded emergency rooms. and filled the hospital bed.
But 2022 has proved a serious reality. Labor costs have grown exponentially as staff burn out and nurses quit hospital jobs for lucrative travel deals.
Even today, contract nursing costs are at least 60% higher than pre-pandemic levels. Nationally, 53% of hospitals expect to be at a loss by 2022, according to a report by consulting firm Kaufman Hall.
Riney said the hospital is confident in its fundraising ability and its portfolio offers excellent capital leverage. The project will also be supported by unspecified public funding and supported by tax dollars.
“A project of this magnitude would require multiple sources of funding, including our own investment,” Riney wrote in a statement. “Additionally, we are seeking financial support from generous donors and the community who share our mission and vision. We will also explore grant opportunities. and other appropriate funding sources.”
Laura Appel, executive vice president of government relations and public policy at the Michigan Health and Hospital Association, compared healthcare investment to other public goods that must be fulfilled regardless of pressure. current finances.
“No matter what the state’s financial situation is, we’re always working on the roads. You can’t let them go,” Appel said. “It’s also the logic that explains why systems are always running on top of their infrastructure — you have to keep up even in times of great financial trouble.”
Alex Calderone, chairman of the Birmingham-based turnaround and consulting firm, said it would be decades before the system or the public knew whether HFH’s bet was financially worth it. Advisory group.
“I think this is good for the state, the city and the region as a whole,” Calderone said in an email to Crain’s. “Local residents will have access to a world-class facility and its operation will attract more people downtown, whose money will flow into other businesses. Infrastructure. is old and in need of replacement and to some extent we are limited in capacity.Basic research also has the potential to attract top scientific and medical talent to the region. say, time will tell whether there is a return on investment in dollars and cents.”
Henry Ford and most of Michigan’s health systems are nonprofits and also have a public obligation.
Remember that the primary goal of healthcare, at least from the perspective of the communities it serves, is not necessarily making money,” Calderone said. part of the project will be funded through philanthropic efforts.”
This story first appeared in Crain’s Detroit Business.
