Merger with SCL Health brings Intermountain’s net income to $2.7 billion
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Dive briefs:
- Intermountain Healthcare reported net income of $2.7 billion in the first six months of the year despite heavy investment losses and weak operating income.
- The Utah-based nonprofit’s 46% year-over-year increase in net income was spurred by the more than $4 billion contribution from its merger with SCL Health, which closed in April, according to recent financial statements. I put it on.
- By comparison, Intermountain brought in annual net income of $1.2 billion in 2020, $1.1 billion in 2019 and $599 million in 2018.
Dive Insight:
intermountain and SCL entered into a merger agreement in December to combine its healthcare systems. The merger, which he completed in April, created a $12 billion system and extended Intermountain’s reach to Colorado.
In its first financial report since the partnership, Intermountain, which has 33 hospitals and manages hundreds of clinics in seven states, reported revenue of $6.5 billion in the first six months of 2022, up from the previous year. 25% increase in ratio.
Expenses increased 31% to $5.9 billion, driven primarily by increased employee compensation and benefits and increasingly expensive supplies.
Net operating income was $285 billion, down 38% year-over-year.
Intermountain’s inpatient and hospital outpatient numbers decreased by 1% and 7%, respectively, while emergency room visits increased by 11%. Visits to the system’s non-hospital clinics also increased by 11%.
Inpatient surgery decreased by 2% and ambulatory surgery increased by 4%. This suggests a broad shift away from care provided in hospital settings.
Intermountain’s results so far mirror those of other large US systems in 2022, with major commercial chains reporting lower operating profits and lower attendance numbers. Fierce labor competition amid an ongoing labor shortage is driving labor costs skyrocketing, while inflation and supply chain pressures are driving up the cost of hospital supplies needed to deliver patient care.
Some of the largest US nonprofits, including Kaiser Permanente and Sutter Health, reported net losses in the second quarter. Providence, a leading nonprofit, said it will report an operating loss of $934 million in the first half of 2022, citing costs and operational stressors. Providence plans to restructure and cut executive positions to become a more agile organization.
Ratings agency Fitch said on Tuesday that prospects for nonprofit hospitals are “worsening” amid mounting cost pressures, along with lost investments.
On Friday, Intermountain named Lydia Jumonville as interim CEO after Marc Harrison announced plans to leave the Salt Lake City-based system for venture capital firm General Catalyst. Intermountain’s board of directors is searching nationwide for a permanent chief executive officer, which it hopes to complete by the fall.
