- Mass General Brigham reported a net loss of $949 million in the third quarter ended June 30, compared to a gain of $870 million in the same period a year ago, as unfavorable financial markets took a toll on non-operating results.
- The Boston-based hospital operator also pointed to what it called "unprecedented" financial pressure due to the cost of supplies, inflation and a labor shortage, which has limited inpatient capacity across its system, in a press release.
- Mass General saw a loss from operations of $120 million, resulting in a negative 2.8% operating margin in the quarter. That compared to operating income of $128 million, or a 3.1% operating margin, in the same period a year ago. Provider activity resulted in a loss of $121 million, while insurance activity generated income of $1 million, the system said.
Like many of its hospital peers, Mass General has faced a difficult year so far as non-operating losses added to ongoing challenges from rising costs, supply chain disruptions and labor shortages.
Health systems reporting weaker results in the latest quarters including Kaiser Permanente, Sutter Health and for-profits HCA Healthcare, Tenet Healthcare, Community Health Systems and Universal Health Services. Advisory firm Kaufman Hall predicted hospitals would likely finish out the year with historically low margins.
Mass General said pressures from staffing shortages that have pushed up labor costs have persisted despite the rapid decline of the winter COVID-19 omicron surge.
“As these challenges are unlikely to subside in the near term, we must continue and even accelerate our efforts to improve efficiency, deliver care in the most appropriate and convenient settings, and integrate payer and provider capabilities to improve affordability for individuals and employers,” Mass General Chief Financial Officer Niyum Gandhi said in the system's earnings press release.
Mass General reported higher operating revenue of $4.26 billion in the third quarter, up from $4.08 billion a year ago. Operating expenses, however, grew to $4.38 billion from $3.95 billion a year ago. Expenses remain elevated due to an 11% increase in wages, reflecting continued high use and cost of temporary staffing as well as wage adjustments to retain employees, along with a 10% rise in employee benefit costs and 8% increase in clinical supply costs, the system reported.
Mass General is under pressure from state regulators to curb spending. It was required to submit a financial performance improvement plan this spring after the Massachusetts Health Policy Commission determined that its spending growth was likely preventing the state from meeting healthcare cost containment goals.