Monday, April 13, 2020
The COVID-19 pandemic in Michigan has significantly impacted Beaumont Health’s operations. As the number of coronavirus cases rose in March, it has materially impacted operating and non-operating income for the first quarter of 2020.
As of March 31, Beaumont’s net income was -$278.4 million, a decrease of $407.5 million over the same period in 2019. Operating revenues fell to $1.07 billion, a $78.2 million decrease over the $1.15 billion reported in the first quarter of 2019.
Net operating income for the first three months of 2020 was -$54.1 million (-5.0% operating margin), a $91.7 million decrease from 2019’s result of $37.6 million (3.3% operating margin). Non-operating losses for the first quarter were $224.6 million, compared to a non-operating gain of $91.6 million in the same period last year.
“The Beaumont Health team remains focused on caring for our COVID-19 patients and the many other patients we serve with other diagnoses. Right now, we have the resources, staff and personal protective equipment to care for our COVID-19 patients,” Beaumont Health Chief Financial Officer John Kerndl said. “However, the shelter-in-place order and community concerns about the virus have led to significant reductions in emergency center visits, non-essential surgeries and diagnostic services. We believe these reductions will continue well into the second quarter and negatively impact financial performance in a significant way.”
Beaumont has a strong balance sheet with extensive liquidity. While Beaumont has the financial wherewithal to weather these challenges, the organization is taking the following actions to improve financial performance:
- Pursuing all Federal and State programs including FEMA, CARES and other COVID-19 programs.
- Deferring all non-essential and non-COVID-19 related capital expenditures.
- Evaluating all expenses, including staffing levels, and identifying ways to reduce expenses to align costs and current volume levels.
“We will continue to explore and pursue all options and plans that will help our organization survive this crisis and return to a position of strength after COVID-19 is no longer a threat to our community,” Kerndl added.
Beaumont Health’s treasury indicators are as follows:
- Cash and investments: $2.052 billion at the end of the first quarter for 2020, compared to $2.1 billion for the same period in 2019.
- Unrestricted days cash on hand was 175.9 days in 2020 versus 172.9 days in 2019.
- Total debt for 2020 was $1.52 billion compared to $1.57 billion for 2019.