Recent nonprofit hospital and health system financial results, several exceptions aside, have by and large shown some notable improvement in operating income.
By reducing contract labor costs and carrying out other cost management initiatives in response to soaring staff and supplies expense, some systems have managed to eke out such operating improvements.
Greensboro, N.C.-based Cone Health, Hartford (Conn.) HealthCare and West Orange, N.J.-based RWJBarnabas Health were all examples of health systems inching into the black regarding operating income in the opening months of 2023, while other systems (Danville, Pa.-based Geisinger Health, Bristol (Conn.) Health ) were able to stem some of their previous losses even while remaining in the red operating-wise.
And then there are some very notable exceptions to this apparent trend, not least Chicago-based CommonSpirt, which posted a quarterly operating loss of $658 million and a nine-month loss of $1.1 billion May 15, extending previous year declines.
But even in the direst circumstances, improved non-operating income such as investment returns has boosted the bottom line of many health systems.
CommonSpirt, for example, while unable to stem its operating losses, did enjoy a boost at least from its investment income, reporting lower net losses of $231 million in the first quarter and $445 million for the nine-month period.
Others reporting operating losses, for example Baltimore-based University of Maryland Medical System, still came out in the black once investment returns were factored into the equation.
It's a far cry from all-too-recent headlines screaming out hefty losses for health systems across the country as declining investment fortunes merged with tough operating losses to form a toxic brew.
For now, at least, such improving investment returns are mostly mitigating sustained operating pressures that undoubtedly remain even as some systems are slowly turning that aspect of financial management around.
But investment returns are highly variable and could easily swing lower as many negative macro forces remain, not to mention future ones as yet unknown.
It is still the operational side of things that hospitals and health systems need to focus on, because there is at least some measurement of control over that compared with stock market and economic volatility.
"The real crisis in healthcare is operational," Matt Swafford, CFO of Bend, Ore.-based St. Charles Health, wrote in a LinkedIn post earlier this year. "Operations requires daily/weekly/monthly/annual ongoing performance and risk management work. Investment portfolios need a five-year horizon for ongoing performance and risk assessment."