Boston-based Mass General Brigham, formerly Partners HealthCare, recorded an operating loss in the third quarter of fiscal year 2020 and expects a significant decrease in patient service revenue this year.
The health system reported operating revenues of $3.1 billion in the three months ended June 30, down from $3.6 billion in the same period last year, according to recently released financial documents. Despite a gradual improvement in patient volume in late May and June, the health system reported a $745 million year-over-year decline in net patient service revenue in the third quarter of this year due to COVID-19 and related governmental actions, the health system said.
Though future financial performance will depend on several factors, the health system currently expects patient revenue loss in fiscal 2020 related to COVID-19 to be between $1 billion and $1.5 billion.
Mass General Brigham ended the third quarter of fiscal year 2020 with an operating loss of $373.2 million, compared to operating income of $156.1 million in the same quarter a year earlier.
The health system has taken several steps to help offset financial damage from the pandemic, including reducing capital expenditures by roughly $550 million, implementing an administrative hiring freeze, cutting executive compensation and suspending the employer-funded portion of retirement plans. It also received approximately $334 million in grants made available under the Coronavirus Aid, Relief and Economic Security Act in the three months ended June 30.
After factoring in nonoperating income of $710.8 million, the health system reported net income of $337.6 million in the third quarter of this year, down 4.6 percent year over year.
"Like health care providers everywhere across the nation, the events of the past months have presented us with challenges of every kind — clinical challenges, workforce challenges, and unprecedented financial challenges," said CFO and Treasurer Peter K. Markell in an earnings release. "We are working hard to welcome our patients back to a safe environment and we are seeing our doctor's offices, operating rooms and labs return to a new normal, which has started to put us on a path toward fiscal recovery. However, COVID-19 has not gone away, so while we continue to work with our partners in the community to do everything we can to combat the pandemic, future costs — economically and socially — remain uncertain."
Looking at the first nine months of 2020, Mass General Brigham reported a net loss of $698.2 million on revenues of $10.1 billion. The system posted net income of $513.9 million on revenues of $10.4 billion in the same period a year earlier.