Sutter Health Banks $636M in Q2

Nevertheless, Sutter warned that "financial challenges remain considerable and more difficult decisions lie ahead."

Sutter Health second quarter financials show that the Sacramento, California-based integrated health system had a prosperous second quarter, with reported total income of $636 million, nearly three times the $220 million banked in Q2 2020.

For the three months ending June 30, Sutter reported $106 million in income from operations, up from the COVID-related loss of $321 million in Q2, 2020. Total operating revenues were $3.5 billion and operating expenses totaled $3.4 billion.

Most of total operating revenues -- $3.02 billion – were attributed to patient services, up from $2.16 billion reported in Q2, 2020. Another $407 million came from premiums paid to Sutter's integrated health maintenance organization. The health system also reported $251 million in investment income, with the value of its investments increasing by another $270 million.

Nevertheless, Sutter warned in a press release that "financial challenges remain considerable and more difficult decisions lie ahead."

"Despite the improvement, Sutter Health's balance sheet remains vulnerable and, as such, we continue to stay the course on our plan to stabilize our system's financial health to help ensure fiscal resiliency and sustainability going forward," Sutter said.

Over the next year, Sutter said it must repay about $1 billion in pandemic relief funds, such as temporarily deferred payroll taxes. The health system says it is also adjusting to skyrocketing labor costs, which were more than $3.2 billion in the first half of 2021, and state seismic mandates.   

Sutter said it's in the middle of a "sweeping financial review" that will identify efficiencies, close unprofitable services, reduce "our real estate footprint," and redeploy employees.