Grand Blanc, Mich.-based McLaren Health Care reported $80.1 million (1.2% margin) in operating income for the fiscal year ending Sept. 30, a 20.8% drop from the $101.1 million operating gain (1.5% margin) posted in the previous fiscal year.
McLaren attributed the decrease in operating income to rising labor and benefit costs as well as the increased costs of supplies and pharmaceuticals.
Revenue increased 0.7% year over year to $6.66 billion while expenses rose 1% to $6.58 billion.
The health system reported a $123.8 million increase in salaries and wages and employee benefits and payroll taxes, which increased 7.4% and 7.1%, respectively. The increases are primarily due to pay increases, locum tenens physicians and additional physicians onboarded in 2024.
McLaren reported $511.1 million in net income for FY 2024, compared to a net loss of $278.5 million in FY 2023. As of Sept. 30, long-term debt for the health system stood at $1.65 billion.