Becker's Hospital Review

10 CFO / FINANCE Mass General Brigham losses mount as operating margin dips to -2.5% By Alan Condon B oston-based Mass General Brigham posted a $432 million loss (-2.6 percent operating margin) for the fiscal year ending Sept. 30, with inflation, workforce shortages and a worsening capacity crisis continuing to affect the health system's financial performance. For 2022 overall, the system reported a $2.3 billion loss, including a nonoperating loss of $1.8 billion, according to a Dec. 16 news release. e figures represent a sharp decline from fiscal year 2021, when it posted an operating income of $442 million, which included $262 million from the Coronavirus Aid, Relief, and Economic Security Act and the Affordable Care Act. Total operating revenue for fiscal year 2022 was $16.7 billion. Higher inpatient acuity in addition to longer lengths of stay at hospitals led to a decline in discharges (-2 percent) and curtailed patient care revenue growth ($437 million or 4 percent) to $11.9 billion, according to the health system. MGB generated $931 million in premium revenue (2 percent increase), $2.5 billion in research revenue (10 percent increase) and $1.4 billion in other revenue (23 percent increase), excluding $232 million CARES Act funds received in 2021). Operating expenses increased 10 percent to $17.1 billion compared to 2021 and remain elevated due to increases in wages (9 percent), employee benefit costs (13 percent) and clinical supplies (13 percent). MGB said it is identifying administrative efficiencies to cut costs, including eliminating vacant administrative positions. In addition, local leaders across the system are revisiting fiscal year 2023 budgets and projects to reduce non-labor expenses and save costs. "We are employing strategies and tactics to address capacity challenges and ongoing inflationary pressures on labor and supplies costs, including a heightened focus on clinical integration to enhance patient care efficiencies and resource stewardship," CFO and treasurer Niyum Gandhi said in the release. "Simultaneously, we are taking the next steps in transitioning our care model to one based on value rather than volume, facilitated by the launch of a zero premium Medicare Advantage plan, moving approximately 140,000 Medicaid members into a full risk program and demonstrating our commitment to improving the affordability of patient care." MGB also plans to address the labor shortage by developing robust workforce pipelines and fostering growth opportunities for staff to grow within the system and strengthen retention. "e stress placed on our workforce and our system over the past several years has been enormous, and the employees at Mass General Brigham continue to show strength and resiliency," said Anne Klibanski, MD, president and CEO. "We are confident that thoughtful and strategic decision-making coupled with efficient resource management will enable us to continue investing in critical medical research, education, and the communities we serve, while ensuring that we can care for every patient who needs us." n UChicago Medicine, AdventHealth finalize joint venture By Molly Gamble U niversity of Chicago Medicine and AdventHealth began 2023 with closure of their joint venture, leaving UChicago Medicine with controlling interest in four AdventHealth hospitals in Illinois. The organizations announced plans for the joint venture in September 2022. Under the agreement, which took effect Jan. 1, 2023, UChicago Medicine gains a controlling interest in AdventHealth's Great Lakes Region, which includes four hospitals in Chicago's western suburbs of Bolingbrook, Glendale Heights, Hinsdale and La Grange and a network of nearly 50 physicians' offices and outpatient sites. Altamonte Springs, Fla.-based AdventHealth retains the remaining ownership and will continue to manage daily operations of all facilities, which will be co-branded UChicago Medicine AdventHealth. Both UChicago Medicine and AdventHealth will maintain their separate system-level governance and administrative structures. "The biggest benefit of this partnership is to patients," Tom Jackiewicz, president of the University of Chicago Medical Center, said in the news release. "AdventHealth Great Lakes' patients now will have seamless access to UChicago Medicine's specialty and subspecialty care and the latest clinical trials without the commute." The joint venture is the latest extension of UChicago Medicine from city to suburb. The academic health system is also developing the city's first freestanding comprehensive cancer facility on its medical campus on the South Side and a multispecialty ambulatory center in Crown Point, Ind. n

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