Four of the largest for-profit health systems saw operating margins improve year over year for the first quarter, but margins remain volatile for much of the nonprofit hospital sector.
Labor costs remain by far the biggest component of hospital expenses and are the most meaningful differentiator between stronger and weaker operating performance.
"At a macro level, margins continue to show improvement, although not uniformly across the sector, and the pace of improvement for many remains sluggish," Fitch Ratings said in a June 25 report. "A select few health systems continue to enjoy strong operating margins, which remains a mark of distinction in the current sector landscape."
Here are 16 nonprofit health systems that reported operating gains in the first quarter of 2024:
Note: This is not an exhaustive list.
1. Oakland, Calif.-based Kaiser Permanente reported $935 million in operating income for the first quarter, up from a $233 million gain in the same period last year. Kaiser's health plan, hospitals and their respective subsidiaries posted operating revenues of $27.4 billion and expenses of $26.5 billion, up from $25.2 billion and $25 billion during the same period in 2023. First-quarter net income excluding Risant Health's acquisition of Danville, Pa.-based Geisinger was $2.7 billion. Including the acquisition, Kaiser posted a net income of $7.4 billion for the quarter, up from $1.2 billion in the first quarter of 2023.
2. Rochester, Minn.-based Mayo Clinic reported an operating income of $363 million in the first quarter, up from $149 million over the same period last year. First-quarter revenue increased 10.9% year over year to $4.7 billion while expenses rose 6.1% to $4.34 billion. Net income hit $927 million for the quarter, up from $420 million during the same period in 2023.
3. Renton, Wash.-based Providence is back in the black after reporting $176 million in first-quarter operating income, up from a $345 million operating loss in the same period last year. Revenue increased 11% year over year to $7.8 billion while expenses rose 6.4% to $7.6 billion. Net income hit $360.3 million in the quarter, compared to $454.5 million for the same period in 2023.
4. Norfolk, Va.-based Sentara Health posted $148.3 million in first-quarter operating income, up 20% from $123.5 million in the same period last year. Revenue increased 8% year over year to $3.3 billion and expenses grew by 7.5% to $3.2 billion. Sentara posted a net income of $427.2 million in the quarter, up from $387.8 million.
5. Salt Lake City-based Intermountain Health saw an operating income of $134 million in the first quarter, up from $104 million during the same quarter in 2023. Revenue increased 6.6% year over year to $4.3 billion while expenses rose 6.5% to $3.9 billion. Intermountain reported a net income of $757 million in the quarter, up from $549 million in the prior-year period.
6. Orlando (Fla.) Health posted an operating income of $126.9 million in the first quarter, down from $134.7 million in the same period last year. Revenue increased 16.3% year over year to $1.8 billion and expenses increased 18.5% to $1.6 billion. Orlando Health posted a net income of $328.9 million in the quarter, up from $233.3 million.
7. New York City-based NewYork-Presbyterian saw an operating income of $112.5 million in the first quarter, up from $398.7 million in the same period last year. Revenue increased 10.7% year over year to $2.6 billion while expenses grew by 11.9% to $2.5 billion. The health system reported a first-quarter net income of $400.1 million, up from $336.4 million.
8. Charlotte, N.C.-based Advocate Health reported $103.7 million in first-quarter operating income, compared to $10.4 million during the same period in 2023. Revenue in the quarter increased 7.8% year over year to $8.1 billion while expenses grew by 6.6% to $8 billion. Net income hit $682.6 million in the quarter, up from $ 578.7 million.
9. Phoenix-based Banner Health saw an operating income of $89.3 million in the first quarter, down from $128.1 million in the prior-year quarter. Revenues increased 5.6% year over year to $3.7 billion while expenses rose 7% to $3.6 billion. Banner posted a net income of $358 million in the quarter, up from $292.3 million over the same period last year.
10. New Hyde Park, N.Y.-based Northwell Health reported an operating income of $73 million in the first quarter, up from a $22.6 loss in the same period in 2023. First-quarter revenue increased 11.4% year over year to $4.5 billion and expenses grew by 9% to $4.4 billion. Net income was $359.4 million, up from $241.4 million.
11. Grand Rapids and Southfield, Mich.-based Corewell Health reported an operating income of $65.7 million in the first quarter, down from $102 million in the same period last year. Revenue grew to $4 billion, up from $3.7 billion. Expenses were $4 billion, up from $3.6 billion. Corewell saw a net income of $317.5 million in the first quarter, down from $360.6 million in the same period in 2023.
12. Cleveland Clinic posted an operating income of $50.2 million in the first quarter, up from $32.3 million in the first quarter of 2023. Revenue hit $3.9 billion, up from $3.5 billion. Expenses increased to $3.6 billion from $3.3 billion. Cleveland Clinic posted a net income of $332.8 million in the first quarter, down from $335.5 million over the same period in 2023.
13. Reno, Nev.-based Renown Health saw operating income of $32.4 million in the first quarter, up from a loss of $2.1 million in the same quarter last year. Revenue increased 17.5% year over year to $497.1 million and expenses rose 9.3% to $464.7 million. Renown posted a net income of $69.7 million in the quarter, up from a net income of $32.5 million in the first quarter of 2023.
14. Somerville, Mass.-based Mass General Brigham posted $29.7 million in operating income for the three months ended March 31, up from a $6 million loss in the prior-year period. Revenue increased 12.7% year over year to $5.1 billion while expenses rose 11.9% to just under $5.1 billion. Net income grew to $807.3 in the quarter, up from $361.4 million in the same quarter last year.
15. Cincinnati-based Bon Secours Mercy Health posted $29.5 million in first-quarter operating income, compared to a $60 million loss in the same period in 2023. Revenue increased 11.8% year over year to $3.3 billion and expenses grew by 8.5% to just under $3.3 billion. Bon Secours Mercy Health posted a net income of $112.1 million, compared to $85 million in the prior-year period.
16. New York City-based Mount Sinai saw an operating income of $11.6 million in the first quarter, down from $45.3 million over the same period last year. Revenues for the quarter hit $1 billion, up from $981 million in the first quarter of 2023. Expenses totaled $1 billion, up from $935 million. Net income was $9.3 million in the quarter, up from a $20.2 million net loss in the same quarter last year.