Cleveland Clinic is the latest health system to see its earnings hurt by investment losses, posting a $1.07 billion net loss in the first half of 2022.
Expenses rose 15.7% year-over-year to $6.07 billion, including a 41.4% jump in administrative services. Costs for salaries and wages were up 16.2%. Purchased services, which includes information technology and software costs, increased by 22.9%.
First-half revenue at the Ohio-based nonprofit increased 2.3%, to $6.17 billion.
Cleveland Clinic reported a net loss of $786.93 million in the second quarter. Revenue fell 2.7% year-over-year, to $3.13 billion.
Many health systems are struggling to balance higher labor costs with still-recovering patient volumes, leading to deep losses across the industry. As a result, credit rating agency Fitch Ratings this month downgraded the not-for-profit hospital sector’s outlook to “deteriorating.”
Advocate Aurora Health, which reported earnings last week, posted a first-half loss exceeding $600 million. Providence reported a first-half loss of $1.84 billion earlier this month. Also this month, Mass General Brigham reported a $949 million net loss in its fiscal third quarter.
A report released this week from consultancy Kaufman Hall found 2022 is on track to be the worst year for financial performance since the COVID-19 pandemic began. Without funding from the Coronavirus Aid, Relief and Economic Security Act, 2020 would have been the worst.
In July, the median percent change in operating margin was -73.6% from a year ago, the report found. The report used data from more than 900 hospitals.
Discharges were down nearly 6% year-over-year, coinciding with a 3.4% increase in average length of stay, according to the report.