Becker's Hospital Review

8 CFO / FINANCE Mass General Brigham posts $949M quarterly net loss By Ayla Ellison D espite seeing an increase in revenue, Boston-based Mass General Brigham reported a loss for the third quarter, which ended June 30. e health system recorded operating revenues of $4.26 billion in the third quarter of this year, up from $4.08 billion in the same period last year, according to financial documents released Aug. 12. Net patient service revenue was up slightly year over year. e health system said higher inpatient acuity along with longer lengths of stay resulted in a decline in discharges and curtailed patient service revenue. e system's revenue growth was offset by higher expenses. Mass General Brigham's expenses grew from $3.95 billion in the third quarter of 2021 to $4.38 billion in the third quarter of this year. e health system ended the third quarter of this year with an operating loss of $120.18 million, compared to operating income of $128.2 million in the same period a year earlier. "e challenges we face are significant. e national labor shortage continues, leading to higher costs and contributing to ongoing severe capacity constraints," Mass General Brigham President and CEO Anne Klibanski, MD, said in an earnings release. "We are focused on navigating current market dynamics while planning for the future, transforming our organization to deliver services as a single integrated system and enabling our patients to easily access the full continuum of care that we provide." Mass General Brigham ended the third quarter of this year with a net loss of $948.99 million. e health system posted a nonoperating loss of $828.81 million, reflecting unfavorable volatility in the financial markets. In the comparable 2021 quarter, the health system recorded net income of $869.89 million. n Kaiser posts $1.3B loss in Q2 By Ayla Ellison K aiser Permanente reported lower revenues in the second quarter of this year than in the same pe- riod a year earlier, and the Oakland, Calif.-based healthcare giant ended the period with a net loss. Kaiser, which provides healthcare and health plans, re- ported operating revenue of $23.47 billion in the sec- ond quarter of 2022, down from $23.69 billion in the same quarter of 2021. The organization's expenses climbed from $23.34 billion in the second quarter of last year to $23.38 billion in the same period this year. "Much like the entire health care industry, we continue to address deferred care while navigating COVID-19 surges and associated expenses," Kathy Lancaster, Kai- ser executive vice president and CFO, said in an Aug. 5 earnings release. "Kaiser Permanente's integrated mod- el of providing both care and coverage enables us to meet these challenges as demonstrated by our mod- erate increase in year-over-year operating expenses for the second quarter." Kaiser ended the second quarter of this year with oper- ating income of $89 million, down from $349 million a year earlier. After factoring in a nonoperating loss of $1.4 billion, Kaiser reported a net loss of $1.3 billion for the second quarter of this year, compared to net income of $2.97 billion in the same period last year. Kaiser said the loss was largely attributable to market conditions. This is the second quarter in a row that Kaiser has report- ed a loss. The organization closed out the first quarter of this year with a net loss of $961 million, compared to net income of $2 billion in the same quarter of 2021. n Outlook 'deteriorating' for nonprofit hospitals, Fitch says By Andrew Cass C iting more severe than expected macro headwinds, Fitch revised its sector outlook for nonprofit hospi- tals and health systems to "deteriorating" Aug. 16. Nonprofit hospitals have been hamstrung by labor and broader macro inflationary pressures that "are rendering the sector even more vulnerable to future stress," Fitch senior director Kevin Holloran said in an Aug. 16 news release. Investment losses have also contributed to a rockier 2022 than anticipated, and operating metrics are down significantly compared to last year. "While severe volume disruption to operations appears to be waning, elevated expense pressure remains pronounced," Mr. Holloran said. "Even if macro inflation cools, labor expenses may be reset at a permanently higher level for the rest of 2022, and likely well beyond." Many nonprofit hospitals and health systems are expected to violate debt service coverage covenants this year, according to the news release. n

• Cover