ALPENA — MyMichigan Health, the Midland-based nonprofit that owns the Alpena hospital, saw an $8 million loss last year, according to the health system’s recently released annual report.

That loss mostly happened because of a liability concern caused by changes in a contract between MyMichigan Health and the University of Michigan Health System. The contract was changed to say that, if either side ever wished to exit the contract, the exit fee would cost $93 million.

“If there was not this liability concern, MyMichigan Health’s report would have an $85 million profit,” Vic Morgan, MyMichigan Medical Center Alpena finance director, said. “The exit did not happen, but, due to the concerns of liability, we wrote it down as a loss for the fiscal year.”

Overall, the health system reported $1.3 billion in revenue, $109 million more than it took in in 2022, according to the annual reports. In 2023, the hospital took in about $13 million more than it spent.

With interest and other miscellaneous income added in, the hospital would have started 2024 with about $90 million to reinvest in its programs, but pension liabilities and the writeoff of the U-of-M exit fee cut that down to the $8 million loss.

MyMichigan Health had a goal of $40 million more revenue than expenses in 2023, but only reached $13 million, Morgan said.

He said the organization met many obstacles during the 2023 fiscal year, including inflation and the reliance of so-called agency nurses, which are outsourced traveling nurses, to help around the hospital system.

“Medication came at a higher cost, and we saw, overall, inflation on things like gas for our emergency teams and other supplies,” Morgan said. “To help cut down on costs, we’re hoping to hire more local people for our clinical staff and rely less on agency workers, as the cost for them can get expensive.”

MyMichigan Health saw a similar loss of $8 million in fiscal 2022, when the organization completed the construction of the Alpena patient tower and continued to work on other large and expensive projects. That was vastly improved from the $207 million loss reported in 2021.

Morgan said that MyMichigan Medical Center Alpena sits at a comfortable financial level and that 2023’s reports showed a better income than 2022. He said that fiscal year 2024 should also be very good for the hospital.

Morgan also said MyMichigan Health is working on different projects across northern Michigan and that Alpena should see an expansion in its clinical space, along with a new physician’s office.

Morgan did not have a set time for those projects, but said MyMichigan Health is looking at different sites around the area upon which to possibly build.

See MyMichigan Health’s full 2023 financial report below.

MyMichigan Health 2023 Financial Report by JustinHinkley on Scribd