Mass General Brigham continues to struggle with cost increases, staffing problems and capacity issues.
The system on Friday reported net income of $480 million in its first quarter ended Dec. 31, a dramatic improvement from the $104.96 million reported in the year-ago period. However, that jump was largely supported by nonoperating factors, including more than $400 million in investment-related gains. Revenue increased 8.4% to $4.46 billion.
Mass General Brigham posted a $1.43 million operating loss in the quarter, despite $52 million in provider revenue related to the prior year’s activity, which included a $22 million grant from the American Rescue Plan Act of 2021. Expenses rose 8.7% to $4.46 billion, including a 6.1% rise in compensation and benefits costs, which increased to $2.37 billion.
“We are continuing to staff as many beds as possible to help meet patient need, which does require the ongoing use of contract labor,” Chief Financial Officer Niyum Gandhi said in a news release. “The associated costs may temper operating margins over the short term but, over time, we anticipate reaping benefits from clinical integration and resource stewardship initiatives.”
The system said it absorbed a $574 million shortfall related to reimbursements from Medicare, Medicaid and the Health Safety Net program.
In 2022, Mass General sustained a $2.3 billion annual loss, with much of it stemming from poor investment performance. The system has said it is looking to cut costs in areas that do not affect patient care, such as eliminating vacant administrative jobs. It is also working to reduce non-labor expenses and identify other cost savings.
Mass General said it is creating a new leadership structure for its community hospitals and physicians to streamline operations and deliver more coordinated care.