University of Missouri Health Care revenues and operating margins are in line with expectations, but net income is still expected to fall by about $20 million in the year that ends June 30.
The University of Missouri Board of Curators Health Affairs Committee held a meeting Wednesday where MU Health leaders outlined their goals for fiscal 2020. In fiscal 2018 MU Health revenues hit $1 billion for the first time. Director David Parker told the committee that the not-for-profit system expects revenues to hit $1.06 billion in fiscal year 2019 and increase to $1.08 billion in fiscal year 2020.
The organization also had record operating income of $104 million in fiscal year 2018. Mike Blair, MU Health chief financial officer, said in January that the system had a goal of $100 million in operating income every year.
MU Health CEO Jonathan Curtright said Wednesday that the organization budgeted operating income of $78 million in this fiscal year and will beat that figure but not make the $100 million goal.
“We beat our budget by 15 plus percent,” Curtright said. “I feel really good about that performance.”
MU Health also budgeted a profit margin of 7.5 percent, but hit a profit margin of 8 percent in fiscal year 2019.
The hospital plans to add about 25 beds and make better use of 20 to 25 beds at the Missouri Orthopedic Institute, which will create additional revenue streams, Curtright told the committee. Currently 76.5 percent of beds at University Hospital are full, Curtright told the committee. The important thing is that MU Health sat in the ballpark of its operating income targets of $90 to $100 million so it can invest in academic, clinical and research programs, Curtright said.
“We are basically at capacity at University Hospital,” Curtright told the committee.
As revenue has climbed, so has MU Health market share, growing another 0.5 percent in its 25 county coverage area, according to documents given to the committee. MU Health sought to gain even more market share through its purchase of SSM Health hospitals in Jefferson City and Mexico. The Missouri General Assembly did not consider a bill this year which could have approved the merger. The federal trade commission also would need to approve the sale.
In February Curtright and SSM Health CEO Laura Kaiser told employees of both hospital systems that MU Health and SSM Health will informal partnerships as the talks progress. On Wednesday, Curtright said MU Health and SSM continue to work toward ways to get the deal approved.
“We’re trying to come up with creative ideas of how to get this one done that’s in the benefit of the Jefferson City community, the Mexico community, the Columbia community and the University of Missouri overall,” Curtright said.
On June 21, the MU will break ground on the 265,000-square-foot Translational Precision Medicine Complex near Hospital Drive and College Avenue. Steven Zweig, interim MU School of Medicine dean, said the building will bring together people from medical disciplines with engineering students and other students from across the UM system.
The complex is expected to open in July 2019 and will be the first research facility opened on campus since the Bond Life Sciences Center opened in 2004.
“It provides an opportunity to bring people together otherwise might not,” Zweig said. “We will only be better, in terms of research, through collaboration.”