Cleveland Clinic posted an operating income of $64.3 million in 2023 after posting a $211.3 million loss in 2022, according to its financial report released Feb. 29.
The health system had a 0.4% operating margin for the year ended Dec. 31 after posting a -1.6% margin in 2022, according to the report.
Cleveland Clinic said the improved operating performance was driven by an 11.4% increase in operating revenues, "supported by strong patient demand for both inpatient and outpatient services, that outpaced a 9.1% increase in operating expenses in 2023 compared to 2022."
The system had a total operating revenue of $14.5 billion and total operating expenses of $13.7 billion in 2023. Cleveland Clinic said the growth in expenses was primarily driven by higher patient volumes and inflationary trends that increase salaries, wages and benefits, supply expenses and pharmaceutical costs.
"Nationwide, labor shortages for licensed caregivers continued to create staffing challenges, resulting in increased overtime costs and premium pay for employed caregivers as well as ongoing utilization of agency nurses and other temporary personnel to meet the demand of patient activity," the report said. "Agency utilization and costs have remained elevated in 2023 but are below peak levels experienced during 2022 due to various workforce strategies implemented by the System to reduce its reliance on agency personnel."
The system had nonoperating gains of $846.9 million in 2023 compared to losses of $1.1 billion in 2022, according to the report. The gains were primarily due to positive investment returns compared to investment losses experienced in 2022.
Overall, the system reported an excess of revenues over expenses of $911.2 million in 2023 compared to a deficiency of revenues over expenses of $1.2 billion in 2022.
In the three months ended Dec. 31, Cleveland Clinic posted revenues of $3.7 billion, up 5.7% over the same period in 2022. Operating expenses were $3.6 billion in the fourth quarter, up 7% over the same period in 2022.