Sutter Health cites pandemic's role in $1.1B Q1 loss in letter to bondholders

In a recent notification to bondholders, Sutter Health said the COVID-19 pandemic has resulted in significant revenue losses and contributed to an anticipated $1.1 billion net loss in the first quarter of 2020. 

Sutter Health, which is still finalizing its financial report for the quarter ended March 31, released interim unaudited financial results in the letter last week. 

According to those results, Sutter is anticipating a $236 million loss from operations and a total net loss of $1.1 billion in the first quarter of 2020. This compares to $38 million income from operations and a $394 million net income in the same period in 2019.

Sutter also said it expects operating revenue to hit $3.2 billion in the first quarter, down from $3.3 billion in the same period in 2019. Its operating expenses rose to $3.4 billion in the first quarter of this year, compared to $3.3 billion in the same period one year prior. 

Sutter said that it began experiencing losses in revenue as patient volume dipped in mid-March following the shelter-in-place orders and suspension of nonemergency healthcare services. 

As a result of the patient volume drop, about 5,000 healthcare workers were affected, with some working limited hours and others being reassigned and retrained.

Sutter said that as of May 13, it had about $18 million in unplanned capital investments and about $39 million in supply commitments to prepare for the COVID-19 surge. 

"The need for Sutter Health and its affiliates, including the other obligated group members, to adjust their entire integrated network to respond to COVID-19 has been, and continues to be, a costly and difficult endeavor," Sutter Health wrote.

More articles on healthcare finance: 
Mass General Brigham posts $1.6B loss in Q2
New York hospital lays off 70 after denial of federal funding
Hospitals blast CMS decision to double down on price transparency

 

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