The COVID-19 pandemic prompted a steep operating loss at Mass General Brigham, formerly Partners HealthCare, in the recently ended quarter.
The Boston-based health system reported a $373 million operating loss on $3.1 billion in revenue in the quarter ended June 30—a 12% loss margin—compared with a $156 million operating gain on $3.6 billion in revenue in the prior-year period, a 4.4% operating margin. The loss was driven by a massive decline in patient activity compounded by the expense of adding intensive care beds, testing, caring for coronavirus patients and obtaining personal protective equipment.
"This has been a very challenging time for all of us, every day, every week and every month," Dr. Anne Klibanski, CEO of Mass General Brigham, said in a statement.
The not-for-profit system's expenses rose 2% in the quarter to $3.5 billion, including a 3.6% increase in supply costs and 1.9% increase in employee pay and benefits. Meanwhile, the country's large for-profit health systems managed to significantly slash their profit in the quarter. HCA Healthcare, for example, cut expenses 16.6% in the quarter, while Tenet Healthcare Corp. cut costs by 11.3%.
Between March 18 and May 18, Mass General Brigham's Massachusetts facilities were prohibited from performing non-essential elective invasive procedures due to government restrictions. Its New Hampshire facilities were impacted by shutdowns, too. Massachusetts launched a four-phase reopening plan on May 18 that began with high-priority preventative care, pediatric care and treatment for high-risk patients. As of June 30, Massachusetts was in the second phase of its reopening, which allows hospitals and ambulatory sites to provide in-person care for certain routine services.
Mass General Brigham said the impact of COVID led to a 29% decline in net patient service revenue—$745 million—in the quarter ended June 30 compared with the prior-year period, including a decline of $345 million in April alone.
To compensate, the health system lowered executive compensation, suspended merit increases and retirement contributions, implemented an administrative hiring freeze and cut capital spending by about 50%.
Mass General Brigham recorded about $334 million in federal stimulus grants in the recently-ended quarter and received about $1 billion in accelerated Medicare payments, which it must begin to repay this month.
Like other not-for-profit systems with health plans, Mass General Brigham got a slight lift from the performance of its health plan during what could be the toughest quarter of the pandemic. Claims expenses dropped 9% in the quarter year-over-year due to lower utilization, resulting in a -1.2% operating margin on the health plan side, compared with a -12.5% margin on the provider side.
Peter Markell, Mass General Brigham's chief financial officer, said in a statement that the past months have presented clinical, workforce and "unprecedented" financial challenges, and even though the health system is working hard to welcome patients back, the pandemic isn't over.
"COVID-19 has not gone away," he said. "So while we continue to work with our partners in the community to do everything we can to combat the pandemic, future costs—economically and socially—remain uncertain."
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August 08, 2020 at 04:02AM
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Mass General Brigham reports 12% loss margin amid patient care drought - Modern Healthcare
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