About McLaren Health Care

MESSAGE FROM THE CEO & CHAIRMAN

THE CONCEPT OF “COMMUNITY” IS CENTRAL TO THE MISSION OF McLAREN HEALTH CARE. IT IS IMPORTANT TO NOTE THAT A MODERN HEALTH CARE SYSTEM IS A HUGELY COMPLEX NETWORK OF UNIQUE COMMUNITIES.

There are communities around subsidiary operations, specialties of practice, information technology, quality initiatives, patient satisfaction and employee engagement, to name a few. McLaren constitutes hundreds of such distinct “communities,” yet we’ve woven these into a unified, coherent structure with a shared goal of high-value, high-quality health care.

This sense of “community” extends to all the regions in Michigan where we have a presence. Statewide, we’re a major economic engine, but perhaps more importantly, we’re integral to each of the markets we serve, often being the largest employer in smaller towns. Schools, local governments, companies and institutions help define McLaren towns and cities throughout the state, but our local hospitals, outpatient clinics and physician offices keep that identity healthy.

This responsibility charges us with a strong duty to all of our local communities. We provide millions in economic benefits to local economies, far offsetting any of our nonprofit tax benefits. And, we invest millions in building and updating local facilities, which both benefits the communities’ economies and assures continuous improvement in health care standards.

The past year has seen us fulfilling these promises to our McLaren communities. New construction projects are underway in our Port Huron, Northern Michigan, Lansing and Macomb hospitals, as well as at the Karmanos Cancer Center. These infrastructure projects require hundreds of millions of dollars and long-term capital planning, but are a must-have commitment to our statewide family.

Expansion plans are in the works, both for Michigan and surrounding states. Our first outstaate expansion was accomplished in October with the acquisition of MDwise, a 360,000-member Medicaid health plan with $1.5 billion in annual revenues, based in Indianapolis, Indiana. Along with presenting a platform for future growth in Indiana, the expansion of our health plan operations allows us to create greater economies of scale and new opportunities to share data and best practices, all of which will improve the experience of both members and network providers. With this addition, we have grown into a $6 billion health care system, with 40 percent of revenue coming from insurance operations and 60 percent from hospital and physician operations. This acquisition is the first of several health care deals we expect to complete outside of Michigan in the coming years.

Further, we are looking at expanding our footprint in the Thumb region of Michigan through the acquisition of community hospital facilities that provide the opportunity to strengthen clinical services and access for residents in that region.

We will continue to pursue acquisition opportunities, both large and small, as growth into viable new markets is required to achieve the economies of scale modern health care demands.

Still we shouldn’t view health care delivery as just brick-and-mortar hospitals and buildings. The real miracles of health care happen inside those buildings, and 2017 saw major advances in these less visible aspects of care. “Community” embraces our statewide McLaren sense of identity. This means best practices and high standards, pursuing the most effective quality of care, and then assuring you’ll find it at every one of our facilities.

Such savings are vital, because the financial pressure health care faces has been heavy and will grow in the year ahead. Medicare and Medicaid reimbursement continues to erode. Most hospitals and health systems in the United States lose money at current Medicare reimbursement levels. Through focus and hard work, McLaren is able to take care of all our Medicare patients and produce a small positive margin. We expect no increase in this funding, and with the programs (Medicare and Medicaid) totaling about 75 percent of our business, leveraging our scale and finding new efficiencies become crucial.

Our work is paying off – Fiscal 2017 is shaping up to be better than last year, which was a record for McLaren Health Care. But we face a continuing mismatch between health care policy goals and reimbursement. Federal and state support for the Accountable Care Act is a battleground of uncertainty, and could end up with care mandates, but no money to fund them.

The McLaren High Performance Network, our accountable care organization (ACO), continues to grow, with about 1,000 physicians and more than 40,000 covered lives. The ACO model puts the burden on us to provide good outcomes, with a large share of reimbursement at risk unless we deliver. We’re shaping our care delivery to excel under such “at risk” payment models, but too often reimbursement structures still reward volume rather than quality, leaving providers stuck in the middle.

Despite this, we’ve made “quality” of care a priority, and our systemwide performance measures show the results. Our work with the Studer Group in targeting patient satisfaction has brought ongoing progress. HCAHPS scores for our hospitals have shown three years of continuous improvement. Michigan Physician Partners is another quality pacesetter. Their BCBSM PGIP quality ranking among physician organizations jumped from 19th to 13th in just one year.

A year of challenges, for sure, but also one of great achievements. Maintaining a sound financial structure gives us the resources for long-term investments, such as new construction, reshaping our entire digital structure, and seeking growth opportunities.

Entering 2018, the McLaren community is as strong as it has ever been.

PHILIP A. INCARNATI
President and CEO
McLaren Health Care

DANIEL BOGE
Chairman, Board of Directors
McLaren Health Care

McLaren Health Care

McLaren Health Care, headquartered in Grand Blanc, Michigan, is a fully integrated health network committed to quality, evidence-based patient care and cost efficiency. The McLaren system includes 14 hospitals, ambulatory surgery centers, imaging centers, a 490-member employed primary and specialty care physician network, commercial and Medicaid HMOs covering more than 620,000 lives in Michigan and Indiana, home health and hospice providers, retail medical equipment showrooms, pharmacy services, and a wholly owned medical malpractice insurance company. McLaren operates Michigan’s largest network of cancer centers and providers, anchored by the Barbara Ann Karmanos Cancer Institute, one of only 49 National Cancer Institute-designated comprehensive cancer centers in the U.S. McLaren has 26,000 employees and more than 85,500 network providers. Its operations are housed in more than 350 facilities serving Michigan and Indiana.

Key Operational Statistics (2017)

Discharges – 102,877 Observations – 27,735
ER Visits – 414,725
Surgeries – 93,548
Births - 6,001
Ambulatory Visits – 3,764,328
Home Care Visits – 203,479
Hospice Days – 104,279
Licensed Beds - 3,100
Days of Inpatient Care – 573,573
Community Benefit - $267 Million
Employees – 26,000
Contracted Providers – 52,500
Annual Payroll - $1.36 Billion
Net Revenue - $3.82 Billion

McLaren Health Care Service Area

McLaren Health Care service area map

McLaren Health Care Hospitals

McLaren Health Care Cancer Center

McLaren Health Care Orthopedic Hospital

  • McLaren Orthopedic Hospital, a specialty facility in Lansing, Michigan with a total of 79 beds, offers inpatient and outpatient services for the treatment and repair of orthopedic degenerative disease, injury and trauma.

McLaren Health Care Long-Term Acute Care Hospital

McLaren Health Care HMO's

  • McLaren Health Plan (MHP) has been operating as a Michigan-based licensed Health Maintenance Organization (HMO) since 1998 and today delivers health care benefits to 260,000 members.
  • MDwise is an Indiana-licensed nonprofit health maintenance organization offering health care benefits to more than 300,000 Medicaid members.

McLaren Health Care Other Entitles

  • McLaren Clarkston is a a 138,000 sq. ft. Medical Office Building located on 95 acres in northern Oakland County, off Sashabaw Road in Clarkston, Michigan.
  • McLaren Health Management Group provides home health, palliative care, hospice, home infusion, pharmacy and comprehensive laboratory services in more than 30 counties throughout Michigan,
  • McLaren Medical Group employs nearly 450 healthcare providers including physicians, nurse practitioners, physician assistants and nurse midwives.