- The Cleveland Clinic reported a $1.2 billion net loss for 2022 as expenses climbed from the prior year. Expenses ticked up in every key category in 2022, including salaries and wages, supplies and pharmaceuticals, Cleveland Clinic’s latest financial report shows.
- Cleveland Clinic grew 2022 revenue roughly 5% to $13 billion from the prior year, but didn’t outpace expenses as costs increased nearly 14% to $12.4 billion before interest, depreciation and amortization.
- Investment income helped pull the Midwest provider into the red as non-operating losses totaled $1 billion.
Cleveland Clinic joined other hospital operators who faced a challenging 2022, the worst financial year since the pandemic began, hospital consultancy Kaufman Hall has said.
Kaiser Permanente reported a $4.5 billion net loss in 2022, which was driven by labor expenses and investment losses. Mayo Clinic’s operating income was cut in half in 2022 as the system also reported higher labor costs.
In a Jan. 18 speech, Cleveland Clinic CEO Tom Mihaljevic addressed how the system could navigate its ongoing cost pressures.
“Managing through the current reality is no different than what any of us would do at home,” Mihaljevic said. “When costs go up, we reduce our spending and use fewer resources.”
As a result, some administrative hiring has been put on hold, Mihaljevic added. He called on employees to bring forward ideas to find additional cost savings.
”Like managing our own households, it is expected for everyone to contribute,” Mihaljevic said.
About half of U.S. hospitals reported negative margins last year, Kaufman Hall previously reported, amid a pricier labor environment.
Reported labor shortages across healthcare facilities has the industry competing for staff in an already tight market.
Mayo Clinic said workforce shortages led to constraints on capacity last year, which ultimately weighed on its financial results.
It appears hospitals are entering 2023 on more stable ground, Kaufman Hall said in its latest monthly report.
Hospitals fared better during the first month of 2023 than they did in January of last year, Kaufman Hall reported this week, though margins still lagged behind prior years.