Sutter Health logged a $29 million operating income (0.8% operating margin) and $265 million bottom line for the quarter ended June 30, thanks in part to higher patient volumes and their accompanying revenues.
Those tallies are ahead of the $51 million operating loss (-1.5% operating margin) and $457 million of the second quarter of 2022, according to a regulatory filing from the Sacramento-based system.
Year-to-date, the nonprofit now sits at a $117 million operating income (1.5% operating margin) and $463 million of income attributable to its controlling interests.
Three-month and six-month total operating revenues, respectively, rose 9% year over year to $3.8 billion and 8.2% year over year to $7.6 billion. These were headlined by 11.4% and 9.7% increases in patient service revenues that were primarily fueled by higher patient volumes, management wrote in the filing.
Within the second quarter alone, inpatient admissions rose 6.2% year over year while emergency room visits and outpatient revenues increased by 7.2% and 13.2%, according to the current and prior filings. Average length of stay stayed flat at 4.8 days.
Those increases were accompanied by year-over-year jumps in operating expenses, 6.6% for the quarter and 7.2% for the half year. Management chalked these up to a combination of inflationary wage trends, contract labor needs, pricing pressures and greater patient volumes.
Sutter also enjoyed a stronger investment market in 2023. While six-month investment income was just $79 million in 2023 compared to $112 million in 2022, change in net unrealized gains and losses on investments was $251 million during the more recent period compared to the prior year’s $656 million loss.
Sutter spans 23 hospitals, 33 ambulatory surgery centers and dozens of other locations, according to its website. It employs more than 53,000 people and delivers care to more than 3 million Californians.
The organization is coming off a tricky year, having reported a $278 million operating income but a $249 million net loss across 2022, the latter of which was dragged down by investment markets and the $208 disaffiliation of Samuel Merritt University. Leadership said at the time that the stable operations would support reinvestment into expanded patient access, workforce recruitment and cost mitigation.
The organization's higher volumes and revenues during the second quarter echo the trends reported in recent weeks by large for-profit health systems such as HCA Healthcare and Universal Health Services. So far among its fellow nonprofits, integrated giant Kaiser Permanente has reported a $741 million operating income (2.9% operating margin) and $2.1 billion net income for the latest quarter.