Shifting healthcare costs and dwindling patient admissions are some of the main reasons that the University of Miami-owned 560-bed hospital in downtown Miami is struggling, with Miami hospital layoffs taking place since May.
The hospital is situated across the street from the university’s medical school campus in downtown Miami. The facility, formerly known as Cedars Medical Center, was purchased a decade ago by the school in a $260.0-million deal from the HCA hospital chain but has since struggled to turn a profit. The university registered a loss of $94.5 million while operating the hospital for the fiscal year ended May 31, 2017. That amounts to more than double the operating loss of $45.0 million the year prior.
Overall, the UM Health System remains profitable at $83.0 million in 2017, but that’s a large drop from the $169.0 million reported the year before. About 50% of the school’s total revenue is generated through health care, the SEC filing shows.
The SEC filing says hospital expenses rose by 10%. At the same time, revenue declined from $384.9 million in 2016 to $376.7 million in 2017. The combination of revenue decline mixed with increased expenses created the financial woes that have led to multiple rounds of Miami hospital layoffs.
Expenses overall have risen by 28% since 2014. Admissions have dropped from 22,003 in 2016 to 21,413 in 2017.
Some Americans have been reported to be more concerned about attending hospitals since the election of President Donald Trump due to his avowed goal to repeal the Affordable Care Act, otherwise known as Obamacare. The move would put many Americans at risk of paying exorbitant amounts for procedures and treatments, leading many to forgo a hospital visit out of fear.
But while the ACA remains intact, the threat of repeal alone has served to reduce patient numbers in many areas across the country. Insurance companies have also raised their premiums in many parts of the U.S. in order to price in the volatility of an ACA repeal.
The result is that both hospitals and Americans are suffering due to a lack of political certainty. With so much up in the air with regards to health care in the U.S., both hospitals and patients are paying the price. In this case, the Miami hospital layoffs are attributed to the rising health care costs mixed with admission rates falling, but in other instances, the lack of political cooperation is hurting the country.
“UM Hospital can’t stop bleeding money as costs soar and admissions drop,” Miami Herald, November 27, 2017.
“Miami hospital struggles for profitability amid rising costs, declining admissions,” Becker’s Hospital CFO Report, November 28, 2017.