Major health systems the Mayo Clinic, CommonSpirit Health and Mass General Brigham revealed the first details on how the COVID-19 pandemic is hitting them financially, with some systems reporting millions in losses.
The systems announced their first-quarter financial results, which showed a steep drop-off in income in the middle of March when systems canceled elective procedures and patient volume plummeted.
Here is a look at how each system fared in the first quarter:
- Mayo Clinic: The health system started strong with a net operating income of $153 million during the first two months of the year. But after the steep drop off in volume and revenues, Mayo lost $124 million, meaning it produced a net operating income of $29 million for the quarter. Total revenue also decreased by 3.8% to $3.22 billion during the quarter compared to the same period in 2019. The system has cash and investments of $10.55 billion as of March 31, a decline of $647.7 million since the end of 2019 due to major volatility in financial markets.
- CommonSpirit Health: The system that operates facilities across 21 states saw an operating loss of $145 million, which was a lower loss than the $332 million from the year before. The system also recorded $727 million in net patient revenue over a nine-month period that ended March 31, compared to $697 million under the same period the year before. But CommonSpirit saw a 4.2% drop in patient volume for the first quarter. A major reason was the drop-off in March, where admissions dropped by 16.4% compared to the same period in 2019. The system received $713 million from the provider relief fund passed by Congress and $2.6 billion from Medicare's Accelerated and Advance Payment Programs. CommonSpirit is also applying for reimbursement for expenses from the Federal Emergency Management Agency. It anticipates deferring $410 million of employer payroll taxes to December 2021 and 2022.
- Mass General Brigham: The Boston-based health system reported an operating loss of $178 million in the first quarter, a decline of 5.2% from the year before. The biggest loss, not surprisingly, was from the provider sector of the system with $166 million. The system’s insurance plan Allways Health Partners generated a loss of $12 million, Mass General Brigham said in a statement. Things aren’t expected to get better in the coming months for Mass General Brigham, which said it expects to lose patient service revenue of approximately $400 million a month. “The duration of the projected revenue loss will depend on many factors, including the resumption of elective procedures, the effect of the economic downturn on demand for services and payer mix and the extent of federal and state advances and grants as well as the health care industry’s ability to continue to convince patients that it is safe to return for non-COVID care,” the system said.
The hospital systems have reported widespread increases in telehealth as the Trump administration gave providers more flexibility to get reimbursement from Medicare for telehealth.
“Virtual care is being scaled rapidly and is a priority both during the pandemic and over the long term,” CommonSpirit’s financial notice said.
But health systems have slowly begun to resume elective surgical procedures canceled because of the pandemic.