Minneapolis-based Allina Health reported a $352.6 million operating loss in 2023, an 80% drop from the $195.8 million loss reported in 2022, according to financial documents published Feb. 14.
Six things to know:
1. The 12-hospital system ended 2023 with an operating margin of -6.8%, compared to -3.4% in 2022 and 2.7% in 2021.
2. Year over year, revenue increased 5.5% to $5.2 billion while expenses rose 8.3% to $5.5 billion. Salaries and benefits increased 6.9% to $3.4 billion and supply expenses rose 12.3% to $1.4 billion.
3. Strategic cost reductions and opportunistic growth led to a $1.9 million operating income before restructuring and strike expenses in the fourth quarter — the first quarter Allinia reported a positive operating income in more than two years. The system aims to post a "breakeven or positive operating margin in 2024" by accelerating growth and cost reduction efforts and "structuring the organization for today's volatile healthcare environment."
4. Part of Allina's cost reduction efforts include transitioning about 2,000 revenue cycle and IT employees to Optum, beginning May 5. Last year, the system laid off around 350 employees — primarily in administrative and leadership roles — and implemented a hiring freeze for non-clinical roles. Overall, more than 500 positions have been eliminated.
5. Allina had 174 days of cash on hand as of Dec. 31, compared to 226 days at the end of 2022 and 298 days at the end of 2021.
6. After factoring in nonoperating items, including a $206.9 million return on investments, Allina posted a net loss of $155.9 million for 2023, compared to a $379 million net loss the previous year.