Reflecting COVID-19 Impact, Sutter Health's Unofficial Q1 Financials Point to Declines

Between mid-March and the end of April, Sutter's inpatient bed days declined 23%.

Sutter Health's bottom line struggled significantly through Q1 2020, due in part to the coronavirus disease 2019 (COVID-19) pandemic.

The Sacramento-based health system posted a $236 million loss from operations during the quarter, according to interim unaudited annual financials filed this week.

Sutter also posted total operating revenues of $3.1 billion, a negative operating margin of 7.4%, and a loss attributable to the organization of over $1 billion.

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Meanwhile, total operating expenses topped $3.4 billion and capital spending fell sharply to $46 million.

The system suffered severe declines in its patient volumes related to the COVID-19 outbreak, which forced most hospitals to cancel elective surgeries and procedures to handle the influx of patients infected with the virus.

Between mid-March and the end of April, Sutter's inpatient bed days declined 23%, ambulatory facility volumes fell 60%, and outpatient surgical cases dropped off by 73%. Sutter added that 5,000 employees were impacted by the cancellation of elective procedures, with some working part-time hours while others were " temporarily placed in a labor pool for reassignment and retraining."

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Despite the unaudited financials, Sutter stated that it is still finalizing its Q1 financial performance and that the ultimate impact of the pandemic is "not yet known."

Sutter is not the only California-based provider organization that struggled with the financial impact of the coronavirus outbreak to start 2020.

Last week, Kaiser Permanente reported a $1.1 billion net loss in Q1, owing in large part to operational costs for "surge planning, equipment, and preparations," though the company stated that these were "not significant."

Prior to the COVID-19 outbreak, Sutter reported challenges to its bottom line in recent quarterly filings.

The system also agreed to a $575 million settlement with a group of self-funded employers and the California Attorney General's office, though court approval of that settlement has not been granted yet.