Mass General Brigham on Friday reported a $432 million operating loss and a -2.6% operating margin for its fiscal year 2022 as the system was pummeled by the COVID-19 omicron variant, rising labor expenses and sicker patients.
The system’s results reflect an “unrelenting economic crisis” impacting healthcare, Mass General Brigham President and CEO Anne Klibanski said in a statement, calling the challenges facing the system and its employees “enormous.”
In addition to the operating loss, the Boston-based health system reported an additional $1.8 billion in nonoperating losses due to financial market volatility, bringing the system’s overall 2022 loss in its fiscal year ending September 30 to $2.3 billion and wiping out the system’s nonoperating gain of $2.7 billion in 2021.
The losses come after the system announced in late September that it had reached a deal with state health regulators to cut $128 million in annual costs in a bid to tame rising healthcare costs.
Regardless, the system’s expenses totaled $17.1 billion this year, reflecting a 10% increase compared to 2021, driven by a 9% growth in wage expenses and a 13% growth in clinical supply expenses.
Mass General Brigham is one of many nonprofit hospitals across the country facing inflationary pressures, rising labor expenses and fewer patient discharges. Consulting firm Kaufman Hall reported in November that hospitals would face negative margins by the end of the year. Other nonprofit systems including Intermountain, Cleveland Clinic and Advocate Aurora recorded losses due to rising expenses, inflation and investment losses.
Staffing vacancies at Mass Gen Brigham coupled with sicker patients contributed to a 2% decline in discharges, curtailing potential patient care revenue growth, and contributing to an average acute care length of stay of six excess days in 2022. The excess of acute length of stay is 15% higher prior to the COVID-19 pandemic, according to the system.