Becker's Hospital Review

20 CFO / FINANCE Kaiser posts net loss of $961M in Q1 By Alia Paavola D riven mainly by nonoperating losses, Oakland, Calif.-based Kaiser Permanente recorded a net loss of $961 million in the first quarter of 2022, down from a net income of $2 billion in the same quar- ter in 2021, according to financial data released May 6. For the quarter ending March 31, Kaiser reported to- tal operating revenue of $24.2 billion, up from $23.2 billion the year prior. Tom Meier, corporate treasurer of Kaiser Permanente, said the revenue increase was attributed to several factors, including growth of its health plan. Kaiser also saw its expenses increase significantly in the first quarter of 2022 to $24.3 billion, up 9.5 per- cent from the same quarter last year. Mr. Meier said the health system incurred about $1.4 billion in costs from COVID-19, including $900 million for the cost of care, $550 million for testing and $50 million for vaccinations. After factoring in the expenses, Kaiser recorded an op- erating loss of $72 million. In the same quarter last year, Kaiser recorded an operating income of $1 billion. In the first quarter of 2022, Kaiser recorded $889 mil- lion in losses for nonoperating items, including invest- ment losses. "The first quarter was not kind to those investing in the market," Mr. Meier told Becker's. n CommonSpirit posts $591M quarterly operating loss By Ayla Ellison C ommonSpirit Health, a 142-hospital system based in Chi- cago, reported an operating loss for the three months ended March 31, according to financial documents re- leased May 13. CommonSpirit, formed through the 2019 merger of San Francis- co-based Dignity Health and Englewood, Colo.-based Catholic Health Initiatives, saw revenues decline 6.6 percent year over year to $8.3 billion in the third quarter of fiscal year 2022, which ended March 31. The health system also saw expenses rise. Total operating ex- penses reached nearly $8.9 billion in the three months ended March 31, up from $8.3 billion in the same period a year earlier. Expenses tied to salaries and benefits increased from $4.2 billion in the third quarter of fiscal year 2021 to nearly $4.7 billion in the most recent quarter. CommonSpirit recorded an operating loss of $591 million in the three-month period ended March 31, compared to operating in- come of $539 million in the same period a year earlier. CommonSpirit closed out the third quarter of fiscal year 2022 with a net loss of $592 million. In the same period of 2021, the health system reported net income of $1.7 billion. Looking at the nine-month period ended March 31, CommonSpirit posted a net loss of $205 million on revenue of $25.7 billion. In the same period a year earlier, the system reported net income of $4.4 billion on revenue of $24.8 billion. n 441 rural hospitals at risk of losing services or closing By Andrew Cass O ut of 2,176 rural hospitals, 441 face three or more risk factors, putting them at risk of service reduction or closure, according to a May 4 Bipartisan Pol- icy Center report. Eight things to know: 1. ere were 116 rural hospital closures be- tween 2010 and 2019. 2. Federal relief over the past two years helped stabilize facilities and the pace of clo- sures slowed. 3. at assistance was temporary, howev- er, and rural hospitals continue to struggle financially and have had difficulty recruit nurses and other healthcare employees. 4. Financial risk factors rural hospitals face include negative total operating margin, neg- ative operating margin on patient services alone, negative current net assets and nega- tive total net assets. 5. Rural hospital closures can significantly reduce access to healthcare services and also affect the availability of healthcare workers. 6. e Bipartisan Policy Center recommends providing rural hospitals across-the-board Medicare spending reductions until two years aer the federal COVID-19 public health emergency ends. 7. It recommends permanently authorizing the Medicare Dependent Hospital program and making rural low-volume payment ad- justments permanent. 8. It recommends updating or rebasing Sole Community Hospital and Medicare Depen- dent Hospital payment structures to ensure reimbursements are in line with current costs. n Rural hospitals continue to struggle financially and have had difficulty recruiting nurses and other healthcare employees.

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