Fitch Ratings Senior Director Kevin Holloran has called 2022 the worst year ever and most nonprofit health systems will experience significant losses. However, the losses are narrowing, and some systems have reported profitability as far back as 2023.
Cleveland Clinic reported Net income of $335.5 million in the first quarter of the year. That compares to a loss of $282.5 million during the same period in 2022. The health system reported $3.5 billion in revenue for the quarter. Cleveland Clinic has 321 days of cash on hand, which puts it in a strong position for the future.
Boston-based Mass. General Brigham reported A profit of $361 million in the second quarter ended March 31, up from a loss of $867 million in the same period last year. The health system’s quarterly revenue rose 11 percent year-over-year to $4.5 billion. The system’s quarterly loss fell sharply this year, to $8 million, compared to $183 million last year.
Renton, Wash.-based Providence reported First-quarter revenue rose 5.1 percent to $7.1 billion in 2023, and operating losses are trending in the right direction. The system reported an operating loss of $345 million in the first quarter of 2023, down from $510 million last year.
All three systems cite ongoing labor shortages and labor costs as challenges, but are making initiatives to reduce costs. Cleveland Clinic and Mass General Brigham reported operating improvements to positive numbers.
Kaiser Permanente in Oakland, California, too reported Operating income was $233 million in the first quarter of the year, up from an operating loss of $72 million in the same period last year. The system is focused on advancing value-based care for the rest of the year, and the health plan is growing by more than 120,000 members annually.
More regional systems are pushing their losses. SSM Health in St. Louis came out with $57.4 million bankruptcy A quarterly loss of around $16.5 million this year for the first quarter of 2022. Revenue rose 13.3 percent to $2.5 billion in the quarter, as rising labor costs and supply price inflation continued to weigh on the system.
UCHEalth in Aurora, Colo., also reported First quarter revenue of $61.8 million and revenue of over $5 billion.
Not every system is declining. Chicago-based CommonSpirit Health, which reported It stood at $658 million and $1.1 billion at the end of March 31. The system has been able to reduce contract labor costs, but still has had a hiring challenge and spent the past year recovering from the pandemic. Cyber security incident.
As inflation continues and labor shortages become common, hospitals have a long way to go to recover from the pandemic, but it’s good to be moving in the right direction.