Dive Brief:
- Mass General Brigham reported “significant progress” toward financial recovery in its fiscal year 2023 financial results released on Friday. High levels of outpatient activity and a nearly 50% annual growth in the system’s accountable care organization plan membership drove up patient and premium revenues.
- The Boston-based nonprofit health system reported $95 million in operating income — including a one-time $143 million infusion of federal funds — as revenues surpassed expense growth in 2023. Last year, the system reported a $432 million operating loss.
- In a release accompanying the results, Mass General Brigham’s chief financial officer, Niyum Gandhi, characterized the results as a step forward, but noted expenses remained high.
Dive Insight:
The health system, which is the largest private employer in Massachusetts, posted negative operating margins in both the first and second quarters of 2023, spurred by inflation and workforce challenges.
However, Mass General Brigham posted positive operating margins in its last two quarters, logging $69 million in income from operations during the third quarter and $33 million in operational income for the fourth quarter, including federal aid.
Excluding federal funds, Mass General Brigham generated a $66 million operating loss for its 2023 fiscal year ended Sept. 30.
The health system — which was required to file a performance improvement plan with the Massachusetts Health Policy Commission last year after regulators determined its spending was out of line with expectations — has enlisted a series of cost cutting measures and growth projects in order to balance its books.
“Looking ahead to 2024, we will enhance our efforts to reduce our long-term expense trend,” Gandhi said in a release. “At the same time, we will double down on initiatives that generate sustainable revenue outside of traditional care delivery, like the continued growth and integration of our Mass General Brigham Health Plan, and innovative solutions that improve patient outcomes.”
Operating revenue totaled $18.8 billion during its 2023 fiscal year. Premium revenue grew 63% year over year to total $1.5 billion.
Mass General Brigham Health Plan began managing the system’s ACO through the state’s MassHealth program on April 1. The model of syncing the provider-payer experience allows the health system to develop integrated models and expand access for the approximately 160,000 members, according to the system.
Patient care revenue grew 8% year over year to total $12.8 billion, driven by outpatient activity. Outpatient day surgeries grew 9.1% year over year, while ambulatory visits rose 5.2%.
Still, expense levels pressured revenues. Operating expenses increased 9% year over year to total $18.7 billion. The rise in costs were attributed to increases in medical claims, wages and costs, and use of clinical and pharmaceutical supplies, the system said.
Mass General Brigham has been scrutinized in recent weeks for cost-cutting efforts related to labor. Earlier this month, the system conducted layoffs in its tech division after previously offering voluntary buyouts for workers.
At the time, the system said the cuts — which impacted fewer than 20 workers in total — were necessary to support Mass General Brigham’s evolving mission.
