Dive Brief:
- Cleveland Clinic left the red in the first quarter this year, reporting operating income of $32.3 million compared with a loss of $104.5 million in the first quarter of 2022.
- Net income reached $335.5 million, an increase from the prior-year period where it posted a $282.5 million net loss.
- Cleveland Clinic attributed the operating gains to a 16% increase in operating revenue, which outpaced an 11% jump in expenses.
Dive Insight:
Like a number of other health systems, Cleveland Clinic is emerging from a challenging financial year after reporting a $1.2 billion net loss in 2022. Though last year’s revenue grew compared to 2021, increased expenses prevented the health system system from posting a profit.
In its first-quarter financial results, Cleveland Clinic noted that growing expenses are still a concern. Total operating expenses increased 11% in the quarter from the prior-year period, largely due to higher patient volumes and inflationary pressures from labor costs, supplies and pharmaceuticals.
Salaries, wages and benefits increased 10% from the same quarter last year, while supply costs grew 11% and drug costs increased 24%.
Labor shortages continue to be a challenge for the health system, increasing overtime costs and requiring Cleveland Clinic to use more agency nurses and other temporary staffers. Though agency staffing requirements are still high, the system noted they decreased from a peak seen last year.
Non-operating income reached $303.2 million in the first quarter compared with a loss of $178 million during the first three months in 2022, which the system attributed to improved return on its investments.
Inpatient admissions grew 11% from the prior-year period, while patient days increased 5%. Surgical cases, both inpatient and outpatient, increased 16% and emergency department visits grew 13%.
The number of patients served was affected by a COVID-19 surge in the first quarter last year, delaying non-essential procedures. The Cleveland Clinic noted a “strong and steady” recovery of its core services through 2022 and in the first quarter.
