Results for the University of Chicago Medical Center

 

At a time of many challenges and great change for academic medicine, we are proud of the commitments, progress and achievements made by the University of Chicago Medical Center for its patient community and to science. Last year marked a bold new beginning for our organization as we consolidated all of the University’s patient care activities under a single governance and management structure. Our historical commitment to caring for those in need drives a powerful focus in strategy: leveraging our new structure to optimize our distinction rather than our size, our programmatic and financial strength rather than simple growth.

This strategy has proven to be strong, driving earnings up substantially, to $111.4 million in fiscal year 2007. A number of factors are responsible for this improvement in income. First, although overall patient activity in the hospitals and clinics increased by about 1 percent, revenues rose by 7 percent, reflecting a shift toward complex care drawn to the Medical Center from the entire region. New insurance contracts and continued improvement in the revenue cycle also contributed. By comparison, operating costs increased by 2 percent due to a more effective deployment of staff. Additionally, two years of income from the Illinois Medicaid provider tax program was received in 2007, which included $17.7 million owed from 2006 but delayed due to pending federal government approval.

Investments also performed well, exceeding payout to the budget by over $78 million. A $35-million reduction in liabilities for general reserves, as well as other accounting adjustments to reflect better the value of assets, contributed to the increase in net assets. Altogether net assets increased to $910.6 million at year end. The Medical Center continued its annual support of $15 million to the University’s Division of the Biological Sciences for the Academic Renewal Fund, which invests in the basic biological and clinical sciences that underpin the Medical Center’s market position “At the Forefront of Medicine.” Total cash and investments increased by $186.7 million during the year, largely due to retained earnings from operations and investment results.

Financial strength is the key to planning an ambitious future, which includes as a top priority the Urban Health Initiative. The Urban Health Initiative is a broad commitment to improve and expand the health care of nearby residents by collaborating in meaningful ways with health-care providers and organizations throughout the neighborhoods on Chicago’s South Side. Last year, the Medical Center provided nearly $81.5 million in charity care, measured at cost, for patients covered by Medicaid or without insurance, with income from the 2007 Illinois Medicaid provider tax program offsetting $17.7 million of this amount. In a world of finite resources, the Medical Center’s expertise continues to fill a need few others can—providing highly specialized medical care, conducting biomedical research, and educating future physicians and scientists. The Medical Center recognizes that our partner health-care providers in the community excel in delivering primary and specialty care to a broad range of patients. Through the Urban Health Initiative, the intent is to create a contemporary model that optimizes societal resources to deliver health care at the right places, at the right time.

The University of Chicago Medical Center’s 2007 financial performance reflects enhanced coordination among all the components of the biomedical enterprise, focused on a clear vision of supplying the complex care on site that is most suited to an academic medical center, while linking to a larger network of community-based providers. On this basis, the Medical Center is securing the capital required for significant investment in new facilities, technology, and programs that deliver on our missions and are among the finest in the nation.