Mass General Brigham is the latest health system to be hit by financial performance due to inflation and workforce issues.
As a result, it is looking to cut costs.
On Friday, Boston-based Mass General reported a $2.3 billion loss for the 2022 fiscal year ending September 30, compared with a $3.2 billion profit a year ago. Much of the loss — $1.8 billion — was tied to investments and financial market volatility.
The nonprofit system posted an operating loss of $432 million, compared with $442 million in operating income last year, which includes federal COVID-19 relief funding and Affordable Care Act program subsidies.
Total annual operating revenue at the Boston-based nonprofit rose 4.5% to $16.7 billion. Average acute care hospital stays are up 15% from pre-pandemic numbers.
Operating expenses increased by about 10% to $17.1 billion, driven by a 9% increase in wages, a 13% increase in employee benefit costs and a 13% increase. in spending on medical supplies.
To reduce costs, Mass General said it is looking to cut costs in areas that don’t affect patient care, including by eliminating vacant administrative positions. It also said it would review system-wide 2023 budget plans and projects to reduce non-labor costs and identify cost savings. A spokesperson did not immediately respond to a request for information on the number of positions to be cut or cost-saving targets.
Dr Anne Klibanski, president and chief executive officer, said in a press release: “While what we are experiencing today is unprecedented, it is important to remember that we have overcome previous challenges throughout its long history.
Mass General said it absorbed $2.3 billion in shortfalls related to Medicare, Medicaid and the Health Safety Net due to a lack of government reimbursements – up 15% from 2021.
In September, the Massachusetts Health Policy Committee approved Mass General’s 18-month performance improvement plan to curb spending, with an annual savings goal. set at $127.8 million. The plan is to be implemented on October 1.
Healthcare systems across the industry have struggled to stay unlucky this year.
In November, Ohio’s Cleveland Clinic reported a net loss in excess of $1.5 billion for the first three quarters of 2022. Providence, based in Renton, Washington, recorded an operating loss of 1.1 billion dollars in the same period. Chicago-based CommonSpirit Health reported a net loss of $397 million for the first quarter of fiscal year 2023. And St. Louis reported a net loss of $811.83 million for the first quarter.
