Cleveland Clinic posts $422M profit in Q3 as staff expenses rise due to latest surge of COVID-19

Cleveland Clinic generated $422 million in profits for the third quarter of the year as staffing costs and other expenses increased by nearly 13% compared to the same period in 2020.

The hospital system generated a total of $3 billion in the third quarter of the year compared to $2.7 billion in the third quarter of 2020. This was thanks to $2.7 billion in net patient service revenue and $148 million in operating income.

Cleveland Clinic’s net patient revenue increased by 15% to $363.2 million for the third quarter compared to the same period in 2020. The system’s acute admissions increased by 5%, and total surgical cases increased by 4.8%.

The $422 million in profits is below the $600 million it generated in the same period in 2020.

However, total operating expenses increased to $333.8 million, an increase of nearly 13%.

“The growth in expenses is primarily due to the increase in patients served,” according to the system’s earnings report released Monday. “In order to offset the impact of the COVID-19 pandemic, the system has taken measures to reduce costs and expenditures, including restricting travel, reducing purchased/administrative service expenses and other controllable costs.”

The system also worked to postpone certain non-critical capital spending.

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Cleveland Clinic’s salaries and benefits increased by 14% to $208.6 million for the third quarter.

Hospital systems across the country have faced higher staffing expenses in the latest quarter due to the surge of COVID-19 fueled by the more transmissible delta variant.

Cleveland Clinic faced other increases in expenses that include a 12% increase in drug costs to $38.3 million due to the spike in patients served.

Over the first nine months of the year, staffing expenses increased by 11% to $491 million compared to the same period the year before.

“Salaries also increased due to a gratitude gesture from the system in the form of a one-time monetary payment of $500 to all caregivers in April 2021,” Cleveland Clinic added in its earnings report.

The system reported that patient volumes continue to remain below pre-pandemic levels.

For the first nine months of 2021, inpatient admissions declined by 0.4% compared to the same time period in 2019. Inpatient surgical cases also declined by 10% compared to 2019, but outpatient admissions saw a bump of nearly 2%.

Emergency department visit admissions continue to struggle, a persistent trend throughout the hospital industry as care has shifted to other platforms such as urgent care. Cleveland Clinic’s emergency department visits declined by 5% compared to 2019.