Sutter posts $95M operating gain as it cuts costs

Although Sutter Health saw its operating results improve, the Sacramento, Calif.-based health system ended the first quarter of 2022 with a lower net income, according to financial documents released May 4. 

For the three months ended March 31, Sutter recorded revenue of $3.56 billion, up 3.7 percent from $3.43 billion recorded in the same period one year prior. Sutter Health attributed the revenue growth partially to an increase in net patient service revenue for the quarter.

While many health systems saw their operating expenses grow in 2022, Sutter's expenses shrunk by $18 million to $3.46 billion. As a result, Sutter Health ended the period with a $95 million operating gain. In the first quarter of 2021, Sutter had an operating loss of $49 million.

Sutter said it was able to reduce its salaries and benefits expenses by $52 million or 3.1 percent in the first quarter of 2022 compared to the same period in 2021 because of a reduction of employees and additional pension-related costs. Sutter also said other expenses decreased $114 million or 46 percent, primarily because the hospital fee program expense was not yet recorded or approved.

After factoring in nonoperating items, including a $208 million loss from the deconsolidation of an affiliate, Sutter ended the first quarter of 2022 with a net loss of $184 million. In the first quarter of 2021, Sutter recorded net income of $189 million. 

Last year, Sutter said it was launching a systemwide review of its finances after 2020 was one of the "toughest financial years" in the organization's 100-year history.

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