September 30, 2022
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Sutter Health Cuts Spending, Reports Financial Loss

By on August 10, 2022 0

Sutter Medical Center in Sacramento is pictured in 2019. After reporting a second-quarter loss, business leaders said they would continue cost-cutting efforts.

Sutter Medical Center in Sacramento is pictured in 2019. After reporting a second-quarter loss, business leaders said they would continue cost-cutting efforts.

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Sutter Health did not earn enough money to cover its expenses in the second quarter ending June 30dropping about $51 million before breaking even, according to a report the company made to bondholders.

In an emailed statement to The Sacramento Bee on Tuesday, Sutter Health spokeswoman Liz Madison said the company’s financial situation has since stabilized. launched a restructuring plan last year, but that the results for the quarter demonstrated the need to pursue cost reduction efforts.

“Our year-to-date numbers show that we have even more affordability work to do as we strive to best position Sutter Health to serve our patients and communities in the future,” the statement continued. . “We are grateful to our employees and clinicians who have worked diligently over the past few years to help reduce our costs, while managing the pandemic and continuing to provide nationally recognized high quality care.

Sutter’s workforce is down to about 53,000 now, from about 55,000 as of Dec. 31, 2020, according to company financial reports.

Company revenue from the all-important patient services category fell $74 million from the same period a year earlier, but Sutter realized a $69 million increase in what it collects on premiums for its health plans.

In terms of spending, Sacramento-based Sutter reported a $151 million increase in what he spends on so-called purchased services, the fees he pays medical providers. compared to the period a year ago. Salary and benefit costs increased by $30 million.

“The organization continues to face financial headwinds such as inflation and rising personnel costs, as evidenced by our near-break-even operating margin,” Sutter’s statement said. “Even still, we are encouraged that independent rating agencies have recently recognized our efforts to date. In the second quarter, Moody’s, S&P and Fitch all affirmed the system’s existing “A” grade bond ratings.

Sutter holds a number of investments which she did not sell but which declined in value by $495 million during the quarter. The company, however, recorded $56 million in investment income.

In total, Sutter’s loss on its operations and assets was $457 million.

the association the healthcare giant recorded a gain of $95 million from its operations in the first quarter of the year.

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Cathie Anderson covers health care for The Bee. Growing up, her blue-collar parents paid for care out of their own pockets. She joined The Bee in 2002, with roles including business columnist and editor. She previously worked at newspapers such as Dallas Morning News, Detroit News and Austin American-Statesman.