Somerville, Mass.-based Mass General Brigham reported a $72 million operating loss (-0.4% margin) for the fiscal year ending Sept 30, improving on a $48 million loss (-0.3% margin) from the previous fiscal year. The FY 2024 loss excludes $118 million in revenue from prior year activity while the FY 2023 loss excludes $143 million prior year revenue.
Eleven things to know:
1. After including the revenue figures from prior year provider activity, Mass General Brigham reported a $46 million operating gain in FY24, compared to a $95 million gain in FY 2023.
2. Operating revenue increased 9% year over year to $20.6 billion in FY 2024. Patient care revenue grew to $13.4 billion, an increase of $647 million (5%). Ongoing efforts to coordinate systemwide capacity management resulted in an average acute care inpatient length of stay of 6 days, a 1% decline from 2023, and contributed to growth in discharges (3%).
3. Health systems continue to face a severe capacity crisis, and sicker patients presenting at emergency departments leading to overcrowding and academic medical centers having to treat a disproportionate percentage of patients for primary and secondary care needs, according to the health system. A lack of nonacute care beds worsens the issue, keeping patients in AMCs and community hospitals longer than necessary, hindering revenue growth.
4. The system also recognized $2.2 billion in health plan premium revenue (+43% YOY, reflecting an influx of MassHealth members under an accountable care organization that launched in April 2023), $2.9 billion in research and academic revenue (+7% YOY) and $2 billion in other revenue (+13% YOY).
5. Operating expenses increased 9% year over year to $20.5 billion, reflecting increases in wages and benefits ($605 million or 6%), medical claims ($418 million or 39%), and costs and use of pharmaceutical ($335 million or 22%) and other clinical ($105 million or 9%) supplies.
6. Prolonged inflation has driven up labor and supply costs, outpacing modest reimbursement increases. Despite a slowdown in cost growth, years of elevated expenses in a capacity-constrained environment continue to strain the health system's finances.
7. "Our response has included an intense focus on cost management while pursuing new sources of revenue, but ongoing headwinds continue to temper the pace of our progress," CFO and Treasurer Niyum Gandhi said. "We remain committed to supporting our four-part mission as we focus on initiatives to close the revenue and expense growth gap."
8. Mass General Brigham reported a $2 billion in net income in 2024, including a nonoperating gain of $2 billion. In 2023 the system reported an overall gain of $1.2 billion, including a nonoperating gain of $1.1 billion.
9. As of Sept. 30, 2024, long-term debt for Mass General Brigham was $5.8 billion, up from $5.5 billion one year earlier.
10. "As we look ahead to 2025, we will maintain a strong commitment to patient care, research, education, and improving the health of our communities — with a particular focus on supporting our frontline clinicians — while continuing to find new ways to recalibrate the trajectory of our revenue and expense growth rates to ensure long-term financial sustainability," President and CEO Anne Klibanski, MD, said.
11. Mass General Brigham reported a $113 million operating loss (-2.2% margin) in the fourth quarter of FY 2024, compared to a $66 million loss (-1.4% margin) in the same quarter in FY 2023. Inclusive of onetime revenue, the system reported a $13 million operating loss in the fourth quarter of FY 2024, compared to a $33 million operating gain in the same quarter the prior year.