SCL Health deal grew Intermountain by 8 hospitals, $4.2B in net assets

Salt Lake City-based Intermountain Healthcare and Broomfield, Colo.-based SCL Health merged into a 33-hospital system with more than 58,000 employees in April 2022, less than eight months after signing a letter of intent to explore the transaction. 

According to full-year financial results released March 21, SCL contributed eight hospitals and $4.2 billion in net assets to the combined health system, which posted $121 million in net operating income on revenue of nearly $14 billion.

Intermountain said some conflicting reports put the system's 2022 profits at more than $2 billion, but this was attributed to a complex accounting rule related to the SCL merger. The transfer of net assets of SCL to Intermountain is treated as "contribution income," but this is not actual income, rather an accounting entry resulting from the merger, according to the health system.

"Intermountain Health's net operating income for 2022 was $121 million as revenue increases from payers did not keep pace with expense growth in a period of unprecedented labor inflation," the system said. "The nonoperating investment loss was $1.57 billion. While Intermountain's operations were profitable, turmoil in the investment markets resulted in a net loss when the accounting entry related to the merger is removed."

Intermountain said 2022 was a challenging year for the health system but maintained that it is "financially strong” despite its recent results.

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