News Releases

The COVID-19 pandemic in Michigan continued to put a strain on Beaumont Health’s patient volumes, operating income and non-operating income throughout the second quarter of 2020. The effects of the pandemic are expected to continue to be felt throughout the remainder of the year as Beaumont has cared for more COVID-19 patients than any other health care system in Michigan.

As of June 30, Beaumont’s net loss was $146.7 million, a decrease of $355.6 million over the same period in 2019. Operating revenues fell to $2.10 billion, a $220.4 million decrease over the $2.32 billion reported at the end of the second quarter of 2019.

Net operating losses, before other non-recurring expenses (such as restructuring charges, settlements, divestitures, etc.) for the first six months of 2020 were $48.4 million (-2.3% operating margin), a $124.6 million decrease from 2019’s net operating income of $76.2 million (3.3% operating margin). Non-operating losses through the second quarter were $79.8 million, compared to a non-operating gain of $142.7 million in the same period last year.

“The Beaumont team remains focused on providing high-quality care as demonstrated by our recent designation of 19 national rankings by US News and World Report. Surgeries, ER Visits and diagnostic services have begun to recover, but not back to pre-COVID-19 levels.” Beaumont Health Chief Financial Officer John Kerndl said.

While Beaumont has a strong balance sheet with liquidity to weather financial challenges, the system continues to work on recovery plans and has taken multiple steps 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 align costs and current volume levels (As of July 30, Beaumont has returned 1,500+ of the 2,475 furloughed employees to work, which is more than 60%, and continues to bring more back as patient volumes increase. Federal COVID-19 funds Beaumont has received are not contingent upon returning employees back to work.)

Beaumont’s treasury indicators remained strong, primarily as a result of cash increases related to Medicare Advanced Payments of $504 million, a $100 million Line of Credit, CARES Act payments and deferred payroll taxes in the second quarter. The treasury indicators as of June 30 are as follows:

• Cash and investments: $3.233 billion at the end of the second quarter for 2020, compared to $2.1 billion for the same period in 2019
• Unrestricted days cash on hand was 288.8 days in 2020 versus 182.4 days in 2019
• Total debt for 2020 was $1.61 billion compared to $1.56 billion for 2019

In June, Beaumont Health and Advocate Aurora Health signed a non-binding letter of intent to further discussions that began in late 2019 to create a leading-edge high-quality health care system that would span across Michigan, Wisconsin and Illinois. Exploratory and certain due diligence work continues.