Michigan Medicine reports positive financial performance for fiscal year 2025

ANN ARBOR – The clinical enterprise of Michigan Medicine reported projected positive fiscal year end results today, with an anticipated 2.7 percent ($233.5 million) operating margin on forecasted operating revenues of $8.5 billion. 

The results reflect fiscal 2025 performance from University of Michigan Health, the organization’s clinical branch that includes 11 hospitals, hundreds of clinics statewide and the U-M Medical Group, UM Health-West and UM Health-Sparrow.

David C. Miller, M.D., M.P.H., presented the projected results for the fiscal year that ends June 30, along with the fiscal 2026 plan, to the U-M Board of Regents during its regular meeting Thursday.

Financial performance exceeded the anticipated operating margin for the fiscal year. This was due mainly to greater patient volumes than expected across the statewide network, a testament to the demand for care at U-M Health, said Miller, who is president of U-M Health and executive vice dean for clinical affairs. 

“Our success in fiscal 2025 was rooted in our BASE + Growth priorities: Belonging, Access, Safety, Experience and Growth. Our team’s commitment and dedication to those goals results in a successful, integrated, cost effective and high quality health care system,” said Miller.

“I’m proud of the excellent care our teams provide, as they are the reason we can build strength today to secure a future where we provide access to even more patients at U-M Health. This foundation of clinical excellence allows us to fulfill our tripartite mission of research, education and clinical care that advances health to serve Michigan and the world.” 

Fiscal 2025’s financial performance allows for continual investments to benefit Michigan Medicine communities including the construction of a new hospital, called The D. Dan and Betty Kahn Health Care Pavilion, set to open this fall. It also supports projects like the recent opening of the new Ypsilanti Health Center and a new facility in Troy, Mich. 

 The new 12-story pavilion in Ann Arbor will house 264 private rooms capable of converting to intensive care, a state of the art neurological and neurosurgical center, high-level specialty care services for cardiovascular and thoracic patients and advanced imaging services. 

The new Ypsilanti Health Center, located at 300 W. Michigan Avenue in downtown Ypsilanti, opened June 2. The center has 50,000 square feet on three different floors, including family medicine, geriatrics, urology, behavioral health, cardiology, dermatology, ophthalmology, endocrinology and women’s health, as well as an adolescent behavioral health day treatment clinic.

U-M Health also plans a new multi-specialty facility in Troy, Mich. set to open in 2027. The 224,000-square-foot, four-story building is expected to house a multi-specialty facility with diagnostic and therapeutic services as well as a surgery and procedures center. 

In FY26, Michigan Medicine is expected to provide care that includes more than 95,000 inpatient admissions and 4.7 million outpatient visits across more than 200 locations.

Marschall S. Runge, M.D., Ph.D., added that as U-M Health’s grows, there is a strong commitment to patient safety and maintaining the highest standards of care. 

“We are expanding our access through careful planning that includes high standards of patient care and recruitment of excellent team members to staff our clinics and hospital. We can’t deliver on our promises without this base of dedicated, skilled experts in health care,” said Runge, who is CEO of Michigan Medicine, dean of the U-M Medical School and executive vice president for medical affairs for the University of Michigan.

The Regents also approved a budget that sets clinical enterprise financial performance targets for the fiscal year that begins July 1. The fiscal year 2026 plan aims for a 1.7 percent operating margin.

Miller also shared progress with the Regents that included efforts to reduce disparities in pediatric influenza immunizations rates and adult blood pressure control. He also reported that U-M Health was able to safely reduce adult inpatient length of stay and meet goals for timeliness of new patient appointments in 11 ambulatory specialties.

Mortality rates from severe infections also declined, he said.

“Looking to the future, we hope to continue fostering alignment and integration across all of Michigan Medicine,” Miller said. “We will continue to challenge ourselves to lead innovation across all aspects of our tripartite mission: education, research and clinical care.”

About Michigan Medicine: At Michigan Medicine, we advance health to serve Michigan and the world. We pursue excellence every day in our 11 hospitals and hundreds of clinics statewide, as well as educate the next generation of physicians, health professionals and scientists in our U-M Medical School.

Michigan Medicine includes the U-M Medical School and University of Michigan Health, which includes the C.S. Mott Children’s Hospital, Von Voigtlander Women’s Hospital, University Hospital, the Frankel Cardiovascular Center, Kellogg Eye Center, University of Michigan Health-West, University of Michigan-Sparrow and the Rogel Cancer Center. The U-M Medical School is one of the nation’s biomedical research powerhouses, with total research funding of more than $777 million.

More information is available at www.michiganmedicine.org

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