- Sutter Well being posted a $457 million internet loss within the second quarter, in comparison with internet revenue of $636 million within the year-ago interval, as increased bills and diminished funding beneficial properties dragged on the Northern California hospital system. The weaker outcomes adopted a $184 million internet loss within the first three months of the yr.
- An working lack of $51 million within the newest interval was a setback from the $106 million in working revenue it generated within the second quarter of final yr and from the progress of the primary quarter, when Sutter generated $95 million in revenue from operations.
- Risky monetary markets harm funding revenue, which declined to $56 million within the second quarter from $251 million a yr in the past. Unrealized losses on investments totaled $495 million, in comparison with an unrealized achieve of $270 million yr over yr, the nonprofit system disclosed Friday.
Well being programs general confronted a tough begin to the yr as the price of caring for sufferers exceeded income, with some analysts predicting that challenges will linger by the second half.
The most recent replace on supplier funds from Kaufman Corridor discovered hospital bills caught close to historic highs this summer season, buoyed by elevated labor and supplies prices. Fitch Scores, in a dismal outlook revealed final month, predicted it may take years for hospital working margins to rebound to pre-pandemic ranges.
Illustrating the continued pressure on hospitals, for-profit Group Well being Techniques in late July posted a steep internet loss for the second quarter, whereas Common Well being Providers reported its income had been reduce in half. All 4 main for-profit hospital operators noticed internet revenue decline and affected person admissions fall within the second quarter in comparison with the yr prior.
Sutter Well being was forging a path to monetary restoration in 2021 after two years of pandemic-driven losses stemming from escalating labor prices and softer affected person volumes. Now, the system is once more contending with working bills which are outstripping income.
Sutter’s complete working revenues within the second quarter declined barely to $3.49 billion, whereas complete working bills grew 4% to $3.55 billion as spending on salaries and worker advantages, bought companies and provides all elevated from a yr in the past.
For the primary six months of the yr, prices for bought companies surged 15.6%, primarily as a result of skilled charges, Sutter mentioned. Earnings (excluding funding revenue) earlier than curiosity expense, taxes, depreciation and amortization, or EBITDA, for the primary half of the yr decreased 5.9% to $464 million, in comparison with the identical timeframe the yr earlier than, whereas the working margin declined to 0.6% from 0.8%.