Labor challenges, rising costs, inflation and declining inpatient volumes are some of the key factors leading to many hospitals and health systems reporting third-quarter losses. However, Mayo Clinic, HCA Healthcare and Intermountain Healthcare are three systems that have bucked that trend.
While income did slip for these health systems, according to recent financial reports, the drops were not as significant as other healthcare organizations, with all three still reporting an income over a loss for the quarter.
Rochester, Minn.-based Mayo, a 16-hospital system, reported net operating income of $157 million on $4.12 billion in revenue for the third quarter, with its operating margin hitting 3.8 percent. However, like most systems, Mayo's operating expenses spiked in the quarter, hitting $4 billion, which is a 7.1 percent year-over-year increase. Salaries and benefits were up 3.5 percent to $2.3 billion.
Nashville, Tenn.-based HCA was one of the first systems to report third-quarter earnings this year. While revenues dropped and expenses rose, they were not substantial enough to prevent it from posting a net income for the quarter. The 182-hospital, for-profit system saw a net income of $1.13 billion in the third quarter, but it was down from $2.27 billion in the same period last year.
Salt Lake City-based Intermountain Healthcare, which operates 33 hospitals, reported higher year-over-year net income for the nine months ending Sept. 30 after completing the acquisition of Broomfield, Colo.-based SCL Health on March 31. Unlike Mayo and HCA, Intermountain's revenue for the nine months ended Sept. 30 increased from nearly $8 billion to $10.2 billion year over year, primarily due to the acquisition of SCL Health.
On the other hand, Intermountain's employee compensation and benefits hit $4.3 billion, up from almost $3 billion over the same period in 2021. Expenses overall increased from almost $7 billion for the first nine months of 2021 to $9.5 billion for 2022.