The system’s financial report for the three months ended Dec. 31 was released days after the health system said it was “consolidating certain management and administrative positions throughout the system” as it faces a projected budget gap of $250 million within two years.
The system addressed the financial challenges and cuts in its report. Officials said that it is facing an “unrelenting capacity crisis that is straining resources and stressing clinicians and patients.” The system’s academic medical centers are being forced to decline thousands of transfer requests from the community due to overcrowded emergency departments, curtailing patient care revenue growth. Ongoing labor and supply cost inflation are also contributing factors.
“In response to ongoing financial challenges, Mass General Brigham is accelerating action plans to reduce the rate of expense growth through a strategic reorganization of management and administrative positions,” officials said in the report. “This reorganization, which commenced in February 2025, will result in the elimination, consolidation or rescoping of a number of management and administrative roles — with a focus on non-clinical and non-patient facing roles — and is expected to yield annualized savings in excess of $200 million.”
Officials also said that its reorganization will improve efficiency by removing management and administrative layers, which aim to “reduce bureaucracy, enhance decision-making, improve communication and foster a more agile environment.” They also said it will allow frontline staff to have more direct access to leadership, “promoting transparency, accountability and better understanding of team challenges.”
The system’s $54 million operating loss in the first quarter of 2025 compared to an $32 million operating loss (-0.7% operating margin), excluding $114 million of prior year healthcare revenue.
Mass General Brigham reported operating revenue of $5.4 billion in the first quarter, up 11% year over year. Operating expenses also increased 11% year over year to $5.5 billion. Wages increased 9% and benefit costs increased 12%. Supplies and other expenses increased 17%, reflecting increased costs and use of pharmaceutical and other clinical supplies.
The system reported a net income of $282 million in the first quarter of 2025, down from a net income of $579 million in the same quarter last year.
