Dive Brief:
- Salt Lake City-based Intermountain Health last week reported $184 million in operating income for the first half of 2023, a 35% decrease from the prior-year period when the health system posted an operating income of $285 million.
- Expenses climbed to a total of $7.4 billion, offsetting a 22% year-over-year increase in revenue. Intermountain logged nearly $8 billion of revenue for the first six months of the year.
- The nonprofit operator still inked nearly $1.1 billion in net gain in the first half of the year, driven by investment income of $909 million.
Dive Insight:
Intermountain Health formed through a merger between Intermountain Healthcare and SCL Health in the spring of last year, and operates 33 hospitals and hundreds of clinics across seven states. The system rebranded in 2022, dropping “care” from its name to reflect its options for treatment beyond traditional healthcare settings, according to the system.
The nonprofit reported a broad increase in services utilization, with adjusted admissions rising by over 7% year over year. Outpatient visits increased by 8%, and outpatient surgeries rose by 6%.
Intermountain reported a 28% increase in labor costs for the first half of the year compared to the prior year period. The operator hired 6.7% more full-time staff during the first half of the year, and now employs over 55,000 workers, including physicians. Supply costs increased by 26.7%, with total expenses rising 24% from $5.9 billion logged in the prior year period.
Intermountain posted an investment income for the first six months that was nearly five times its operating income — a recovery from 2022, when it reported investment losses of nearly $1.7 billion. Last month, Advocate Health, which also recently formed via a merger, similarly boosted financials on $938 million in investment income — a figure more than ten times its operating income.
Increased patient utilization, including robust inpatient admissions, outpatient visits and surgical volumes, have driven revenue gains for nonprofit hospital systems in the first half of 2023. However, inflation continues to hamper operating margins.
Mayo Clinic, Mass General Brigham and Kaiser Permanente reported operating margins that were in the black on rebounding demand for patient services, though the systems noted rising operating expenses.
