Sacramento, Calif.-based Sutter Health called 2020 one of the "toughest financial years" in the organization's 100-year history and said it will begin a sweeping review of its finances.
"Sutter's costs exceeded revenue, and such a trajectory seems unsustainable, particularly as both COVID and the healthcare industry’s structural challenges will remain for the foreseeable future. As such, Sutter has begun a sweeping review of its operations and finances," Sutter Health said in a March 4 news release about its financial results.
Sutter said its financial review will include restructuring and closing some programs and services and redeploying staff to different departments with higher patient volume.
Sutter Health President and CEO Sarah Krevans said it will take several years for the health system to recover from the financial effects of the COVID-19 pandemic.
"We invested heavily to respond to the pandemic because it was the right thing to do, but it came at a cost, as we experienced one of the toughest financial years in Sutter’s 100-year history," Ms. Krevans said. "It will take several years to fully recover. We will take the necessary steps to make our operations sustainable, while continuing to provide high-quality care and keep our patients, clinicians and communities safe."
In the year ended Dec. 31, Sutter recorded an operating loss of $321 million in 2020, which the health system attributed to care disruptions and increased expenses due to the pandemic.
In 2019, Sutter posted a $548 million operating loss, which was due to a large antitrust settlement.
In 2020, Sutter Health recorded an operating revenue of $13.2 billion in 2020, down from $13.3 billion recorded in 2019. Although Sutter's expenses decreased more than 2 percent to $13.5 billion in 2020, the health expenses still outweighed revenue.
Overall for the year, Sutter ended the period with a $134 million net income, which was attributed to investment gains.