Labor costs remain by far the biggest component of hospital expenses and are the most meaningful differentiator between stronger and weaker operating performance.
“At a macro level, margins continue to show improvement, although not uniformly across the sector, and the pace of improvement for many remains sluggish,” Fitch Ratings said in a June 25 report. “A select few health systems continue to enjoy strong operating margins, which remains a mark of distinction in the current sector landscape.”
Here are 16 nonprofit health systems that reported operating gains in the first quarter of 2024:
Note: This is not an exhaustive list.
1. Oakland, Calif.-based Kaiser Permanente reported $935 million in operating income for the first quarter, up from a $233 million gain in the same period last year. Kaiser’s health plan, hospitals and their respective subsidiaries posted operating revenues of $27.4 billion and expenses of $26.5 billion, up from $25.2 billion and $25 billion during the same period in 2023. First-quarter net income excluding Risant Health’s acquisition of Danville, Pa.-based Geisinger was $2.7 billion. Including the acquisition, Kaiser posted a net income of $7.4 billion for the quarter, up from $1.2 billion in the first quarter of 2023.
2. Rochester, Minn.-based Mayo Clinic reported an operating income of $363 million in the first quarter, up from $149 million over the same period last year. First-quarter revenue increased 10.9% year over year to $4.7 billion while expenses rose 6.1% to $4.34 billion. Net income hit $927 million for the quarter, up from $420 million during the same period in 2023.
3. Renton, Wash.-based Providence is back in the black after reporting $176 million in first-quarter operating income, up from a $345 million operating loss in the same period last year. Revenue increased 11% year over year to $7.8 billion while expenses rose 6.4% to $7.6 billion. Net income hit $360.3 million in the quarter, compared to $454.5 million for the same period in 2023.
4. Norfolk, Va.-based Sentara Health posted $148.3 million in first-quarter operating income, up 20% from $123.5 million in the same period last year. Revenue increased 8% year over year to $3.3 billion and expenses grew by 7.5% to $3.2 billion. Sentara posted a net income of $427.2 million in the quarter, up from $387.8 million.
5. Salt Lake City-based Intermountain Health saw an operating income of $134 million in the first quarter, up from $104 million during the same quarter in 2023. Revenue increased 6.6% year over year to $4.3 billion while expenses rose 6.5% to $3.9 billion. Intermountain reported a net income of $757 million in the quarter, up from $549 million in the prior-year period.
6. Orlando (Fla.) Health posted an operating income of $126.9 million in the first quarter, down from $134.7 million in the same period last year. Revenue increased 16.3% year over year to $1.8 billion and expenses increased 18.5% to $1.6 billion. Orlando Health posted a net income of $328.9 million in the quarter, up from $233.3 million.
7. New York City-based NewYork-Presbyterian saw an operating income of $112.5 million in the first quarter, up from $398.7 million in the same period last year. Revenue increased 10.7% year over year to $2.6 billion while expenses grew by 11.9% to $2.5 billion. The health system reported a first-quarter net income of $400.1 million, up from $336.4 million.
8. Charlotte, N.C.-based Advocate Health reported $103.7 million in first-quarter operating income, compared to $10.4 million during the same period in 2023. Revenue in the quarter increased 7.8% year over year to $8.1 billion while expenses grew by 6.6% to $8 billion. Net income hit $682.6 million in the quarter, up from $ 578.7 million.
9. Phoenix-based Banner Health saw an operating income of $89.3 million in the first quarter, down from $128.1 million in the prior-year quarter. Revenues increased 5.6% year over year to $3.7 billion while expenses rose 7% to $3.6 billion. Banner posted a net income of $358 million in the quarter, up from $292.3 million over the same period last year.
10. New Hyde Park, N.Y.-based Northwell Health reported an operating income of $73 million in the first quarter, up from a $22.6 loss in the same period in 2023. First-quarter revenue increased 11.4% year over year to $4.5 billion and expenses grew by 9% to $4.4 billion. Net income was $359.4 million, up from $241.4 million.
11. Grand Rapids and Southfield, Mich.-based Corewell Health reported an operating income of $65.7 million in the first quarter, down from $102 million in the same period last year. Revenue grew to $4 billion, up from $3.7 billion. Expenses were $4 billion, up from $3.6 billion. Corewell saw a net income of $317.5 million in the first quarter, down from $360.6 million in the same period in 2023.
12. Cleveland Clinic posted an operating income of $50.2 million in the first quarter, up from $32.3 million in the first quarter of 2023. Revenue hit $3.9 billion, up from $3.5 billion. Expenses increased to $3.6 billion from $3.3 billion. Cleveland Clinic posted a net income of $332.8 million in the first quarter, down from $335.5 million over the same period in 2023.
13. Reno, Nev.-based Renown Health saw operating income of $32.4 million in the first quarter, up from a loss of $2.1 million in the same quarter last year. Revenue increased 17.5% year over year to $497.1 million and expenses rose 9.3% to $464.7 million. Renown posted a net income of $69.7 million in the quarter, up from a net income of $32.5 million in the first quarter of 2023.
14. Somerville, Mass.-based Mass General Brigham posted $29.7 million in operating income for the three months ended March 31, up from a $6 million loss in the prior-year period. Revenue increased 12.7% year over year to $5.1 billion while expenses rose 11.9% to just under $5.1 billion. Net income grew to $807.3 in the quarter, up from $361.4 million in the same quarter last year.
15. Cincinnati-based Bon Secours Mercy Health posted $29.5 million in first-quarter operating income, compared to a $60 million loss in the same period in 2023. Revenue increased 11.8% year over year to $3.3 billion and expenses grew by 8.5% to just under $3.3 billion. Bon Secours Mercy Health posted a net income of $112.1 million, compared to $85 million in the prior-year period.
16. New York City-based Mount Sinai saw an operating income of $11.6 million in the first quarter, down from $45.3 million over the same period last year. Revenues for the quarter hit $1 billion, up from $981 million in the first quarter of 2023. Expenses totaled $1 billion, up from $935 million. Net income was $9.3 million in the quarter, up from a $20.2 million net loss in the same quarter last year.
