A bounce back in the third quarter has Sutter Health somewhat less in the red than it was three months ago.
The Sacramento, California-based nonprofit health system reported a $103 million net gain for the three-month period ended Sept. 30, thanks in large part to $244 million in operating income.
This whittled its year-to-date losses down to $538 million, as opposed to the $641 million six-month net loss of June.
The organization’s latest numbers are still, however, a far cry from the $131 million quarterly and $956 million year-to-date net profits it had notched at this time last year.
In the earnings filing, published late Wednesday, Sutter’s management attributed much of the disparity to a $548 million decrease in investment income, a $929 million decrease in unrealized gains and losses on investments and $208 million tied to the disaffiliation of Samuel Merritt University.
On the other hand, management said the loss was partially offset by operations and touted Sutter’s nine-month operating margin increase from 1.5% to 2.6%.
The health system’s total operating revenues were up $383 million (10.6% year over year increase) for the quarter and $488 million (4.6% year over year increase) year to date.
During the quarter, Sutter’s hospitals saw 2% fewer total admissions year over year and saw average length of stay increase from 4.7 days to 4.8 days. Third-quarter emergency room visits rose 9.5% as outpatient revenues increased to account for 44.1% of Sutter’s total gross revenue, up from 40.9% of total last year.
Operating expenses were also up, albeit to a lesser extent than the system’s revenues.
Total operating expenses rose 6.9% year over year to $3.74 billion for the quarter and 3.5% year over year to $10.75 billion for the nine-month period.
Of note, Sutter reduced its salaries and employee benefits expenses by 4.7% during the quarter and 2% year to date, “primarily due to a reduction of employees and pension changes,” management wrote. Purchased services, however, had increased by 9.7% in the third quarter and 13.6% year to date, “primarily due to increased professional fees expense for nurse travelers,” they wrote.
Sutter said it has received $89 million in CARES Act relief funds during the past nine months, up from the $59 million it received through all of 2021.
Sutter employs roughly 51,000 people across 23 hospitals, 33 ambulatory surgery centers and other care locations. It logged $14.2 billion in operating revenue and a net income of more than $1.14 billion during 2021.
The nonprofit also announced in September that Warner Thomas has been appointed as the next president and CEO, starting Nov. 28. Thomas has held the top roles at Ochsner Health for the past decade and will be taking the reins from James Conforti, who had been serving in an interim capacity since January.
“Leaning on my years of experience growing complex, integrated healthcare systems through developing medical programs, expanding physician networks, and creating new payer partnerships, I’m excited to help build on Sutter Health’s past successes,” Thomas said in the announcement. “I look forward to helping shape an era of equitable, accessible and affordable healthcare with long-lasting benefits to Sutter Health’s patients and communities in Northern California.”