University Hospitals continued its trend of revenue growth last year and nearly doubled its operating income from the year prior.
UH ended 2021 with a net operating income of $104.5 million, compared with $54.7 million in 2020, on about $5.3 billion in revenue, which is up from $4.5 billion the year before.
"Our operating performance in 2021 was really strong," said Mike Szubski, UH chief financial officer, "and that made for, really, a pretty good year."
Part of the revenue growth can be attributed to the addition of Lake Health, a $389 million annual revenue acute care hospital system that formally became part of the UH system in April 2021. In the remaining nine months of the year, the operations of the Lake County provider accounted for $361 million of the system's revenue total and about $3.1 million in operating income.
"In 2021 what we saw was very strong volume recovery, post the Delta variant" of COVID-19, Szubski said. "Through April, May, through the beginning of December, we really recovered very well."
This was made possible by revenue oversight, expense management and, to some extent, federal funds for costs related to the COVID-19 pandemic.
"Our costs far outweighed the amount of federal funds we received," Szubski said. "The federal funds probably covered 25% or so of the cost increases we saw in 2021."
In 2021, UH recognized $101 million of CARES Act funding in 2021, about half of which was for 2021 costs and half was related to 2020 costs. The system calculates its total pandemic-associated costs for 2021 at around $192 million, which includes direct COVID-related costs, increased labor costs to cover staffing shortages and unfavorable experience in the employee health plan.
Staffing shortages are an ongoing and pressing issue for health systems.
"I continue to be very positive that UH is going to move its way through these challenges and, you know, end up in a really good place," Szubski said. "We'll see how the world behaves here relative to staffing and these labor issues. But I'm very confident (and) feel that we're on the right path."