February 23, 2006

DMC reports fivefold profit increase

Detroit Medical Center earned $13 million in 2005, the health system\'s top executive said Wednesday, marking the first time in eight years that Michigan \'s largest provider of medical care for the poor has turned a profit without help from a government bailout. CEO Michael Duggan doesn\'t believe the system\'s financial challenges are a thing of the past. But DMC has clearly come a long way from 2 1/2 years ago when it was on the brink of financial collapse. Not only did earnings grow fivefold, but revenue also grew a healthy 8.6% to $1.9 billion, Duggan said in an interview Wednesday. That\'s a marked improvement from 2004, when the system earned $2.5 million on revenue of $1.75 billion. But that profit included $24 million in tax money given to prevent the closure of Detroit Receiving Hospital and Hutzel Women\'s Hospital. DMC employs more than 12,000 people at its nine hospitals and various clinics and serves about 14% of the Detroit area\'s health needs, according to Fitch Ratings, a credit-rating agency that follows the financial performance of the area\'s major health systems.

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