FY2017 Financial Report
Fiscal year 2017 (July 1, 2016 - June 30, 2017) marked another year of strong financial performance, improved patient satisfaction, and recognition of excellence in patient care and quality, education and research. Rush continued to experience consistent operating profitability, growth in revenues and continued liquidity. This financial performance has allowed Rush University Medical Center and its subsidiaries (referred to below as “Rush”) to continue to make improvements within clinical programs and quality of care.
Operating income, one of the most important sources of funding for Rush, was $70 million during FY2017, which reflects an operating margin of 3.1 percent. In addition Rush had strong investment returns due to favorable market conditions, achieving $46 million in nonoperating income. The FY2017 total net income of $105 million is the second highest recorded net income ever for Rush. It exceeded Rush’s financial targets, which have an underlying objective of achieving a return that will allow the institution to invest and fund future obligations as well as to reinvest in our facilities and core activities of patient care, research, education and community service. Rush’s unrestricted cash and investments, a measure of liquidity, totaled $865 million as of June 30, 2017. The consistency of the balance sheet and liquidity has become even more important with the challenging health care environment and the competitive Chicago area market.
Patient care continues to be at the center of Rush’s mission. Through its investments in clinical programs and demonstrated quality of care, Rush has established itself as a local and national leader in health care. Rush is currently ranked fourth among more than 100 academic medical centers by Vizient’s Quality Leadership Award. The award evaluates hospitals on the basis of mortality, effectiveness, safety, patient centeredness and equity of care. In addition the Centers for Medicare and Medicaid Services, or CMS, continues to recognize Rush as one of the highest rated hospitals in Chicago with its rating system. As of December 2017, Rush is the only Chicago area academic medical center to receive a five-star rating. The rating is based on ongoing CMS surveys of patient experiences.
Rush remains committed to supporting the communities we serve, including Chicago's West Side. Rush is investing over $6 million over the next three years in organizations that are working to revitalize neighborhoods on the West Side of Chicago. These investments are part of Rush’s broader endeavor to be an anchor of better health for residents of Chicago’s West Side by improving the economic health of these neighborhoods. In total Rush provided $335 million in community benefits during FY2017. Included within that total, Rush provided $233 million in unreimbursed care to our patients. Rush also financially supports the education of the next generation of physicians, nurses and allied health professionals and supports the cost of research in excess of external funding received.
Rush is in the midst of a long-term strategic plan, which includes new developments on campus as well as other offsite investments that focus on the ongoing shift to outpatient services. Rush continues to see strong volumes in its first significant offsite campus investment with Rush River North, an outpatient development in Chicago’s River North neighborhood that opened in April 2016. Rush has also started construction on two significant offsite developments focusing on outpatient care in Oak Brook and South Loop, both planning to open in FY2019. Rush is continuing to develop plans for the Rush Center for Advanced Health Care on its main campus, which is expected to open in FY2022. The expansion is a 500,000-square-foot building that will consolidate outpatient services and significantly improve the patient experience.
Philanthropic contributions are increasingly important to Rush in order to accomplish its aforementioned long-term strategic plan, and Rush is grateful to its generous donor community in supporting its mission and vision. Rush raised more than $41 million in philanthropic funding during FY2017. In addition the endowment provided $18 million to Rush, which continues to support Rush’s programs, including professorships, research and education, free care, student financial aid, scholarships, and fellowships.
As we have seen over the last several years, the health care environment continues to encounter many difficult challenges. With the consistent shrinking margins health care providers face, unfavorable tax reform to not-for-profit organizations, the state budget crisis here in Illinois and the competitive Chicago market, there is a significant amount of uncertainty in the health care industry. Despite this, Rush is well-positioned to achieve our aspirational goals projected over the next decade. By maintaining our financial strength in the years to come, Rush has a bright future in continuing to pursue our mission and achieve our vision of becoming the leading health system in the region and nationally recognized for transforming health care.
John P. Mordach
Senior Vice President and Chief Financial Officer
Rush University Medical Center
The information in this document is taken from the annual summary report of community benefits prepared for the Illinois attorney general's office. Only a portion of Rush's financial assistance programs meet the office's definition of "charity care."