The northern California hospital system Sutter Health posted a $607 million loss during the first nine months of 2020 as COVID-19 continues to roil the system’s finances.
Sutter Health announced its financial earnings for the third quarter and the first nine months of the year late Wednesday. The system noted that higher expenses to combat COVID-19 helped spur losses.
“The need for Sutter to adjust its entire integrated network to respond to COVID-19 has been, and continues to be, a costly and difficult endeavor,” the system said in its earnings report.
Sutter added that given the evolving nature of the financial crisis, the system cannot “fully determine the cumulative impact of the crisis on its financial condition and operations.”
Sutter generated $9.5 billion in operating revenues for the first nine months of 2020, but its expenses shot up dramatically to $10.1 billion.
The system’s salary and employee benefit expenses shot up to $4.9 billion, compared with $4.6 billion during the same period in 2019.
Hospital systems across the country have faced higher expenses for supplies like critical drugs and personal protective equipment and to pay higher salaries to boost staff to increase capacity to fight COVID-19.
But Sutter did post a $250 million profit for the third quarter of the year as patient revenues started to recover. That increase helped Sutter recover from a staggering $857 million loss in the first half of the year.
Sutter, like most hospital systems, has been buttressed by relief funding. The system got $392 million in relief funding from a $175 billion fund passed by Congress as part of the CARES Act.
It also received $999 million in advance payments under the Centers for Medicare & Medicaid Services’ Accelerated and Advance Payment Program. The payments though are a loan that must be repaid within a year of the first payment.
Sutter said it expects to fully repay the payments by the summer of 2022.
The 24-hospital system tried and failed this past summer to delay proceedings linked to a $575 million settlement with over price-gouging allegations.