Becker's Hospital Review

9 CFO / FINANCE Cleveland Clinic reports $1B loss in first half of this year By Ayla Ellison C leveland Clinic's revenue was down year over year in the second quarter of this year, and the health system ended the period with a loss, according to financial documents released Aug. 29. e health system's revenue totaled $3.1 billion in the three-month period ended June 30, down from $3.2 billion in the same quarter last year. Cleveland Clinic reported expenses of $3.1 billion in the second quarter of this year, up from $2.7 billion in the same period last year. e system saw expenses rise across all categories, including supplies and salaries, wages and benefits. "Nationwide labor shortages have created staffing challenges that have resulted in increased overtime costs and premium pay for employed caregivers as well as an increase in the utilization of agency nurses and other temporary personnel to meet the demand of patient activity," Cleveland Clinic said in an earnings release. "Supplies, pharmaceuticals and other nonlabor expenses have also increased due to recent inflationary trends and supply chain challenges." e health system ended the second quarter with an operating loss of $183.5 million, compared to operating income of $339.5 million in the second quarter of 2021. Aer factoring in nonoperating losses, Cleveland Clinic posted a net loss of $786.9 million in the second quarter of this year, compared to net income of $904.4 million in the same quarter a year earlier. Looking at the first six months of this year, Cleveland Clinic reported a net loss of $1.1 billion on revenue of $6.2 billion. In the same period a year earlier, the health system reported net income of $1.3 billion on revenue of $6 billion, according to the financial documents. Nonoperating losses for Cleveland Clinic were $781.4 million in the first six months of this year, compared to nonoperating gains of $853.5 million in the same period last year. e decrease was primarily due to lower investment returns in the first half of 2022. n Ascension reports $1.8B annual loss By Ayla Ellison S t. Louis-based Ascension reported higher expenses in the 12 months ended June 30 and closed out the year with a loss, according to recently released financial documents. The 144-hospital system reported operating revenue of $27.98 billion in the year ended June 30, up from $27.24 billion a year earlier. Ascension's operating expenses climbed to $28.77 billion in the 12 months ended June 30, up from $26.69 billion last year. The increase was attributed to several factors, including higher salaries, wages and benefits due to staffing challenges and increased use of contract and premium labor. Ascension ended the most recent fiscal year with an operating loss of $879.2 million, compared to an operating income of $676.3 million a year earlier. After factoring in nonoperating items, Ascension reported a net loss of $1.8 billion for the 12 months ended June 30. A year earlier, the health system posted net income of $5.7 billion. Ascension is facing many of the same financial pressures as other health systems across the U.S. More than half of hospitals — 53 percent — are projected to have negative margins for the rest of the year. n Kaiser plans $1.7B expansion By Ayla Ellison O akland, Calif.-based Kaiser Permanente is expanding two hospitals and building two new medical offices, according to The Press-Enterprise. Kaiser is expanding Riverside (Calif.) Medical Center and making upgrades to patient rooms. The project will increase the hospital's beds from 226 to 298, a Kaiser spokesperson told The Press-Enterprise. The project, which will cost an estimated $735.4 million, is expected to be finished in the first quarter of 2027. The health system is expanding Moreno Valley (Calif.) Medical Center by 93,000 square feet. The project is expected to be completed in the third quarter of 2023 and will cost an estimated $250.2 million, according to the report. Kaiser is also building medical offices. One is being built in Murrieta, Calif., and the other will be in Wildomar, Calif. The projects will cost a combined $241.3 million. The health system plans to spend $473.1 million on upgrades to other Kaiser facilities in Riverside County, according to the report. "Our community is growing and Kaiser Permanente is growing with it through $1.7 billion in expansion projects at four locations across Riverside County," said Sammy Totah, PharmD, senior vice president and area manager of Kaiser Permanente Riverside, according to the report. n

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