Sutter Health Announces 2016 Financial Performance
The Sutter Health network of doctors, hospitals and other health care providers announced its financial performance for 2016. Total income for 2016 was $554 million (or 5 percent of revenue), compared to $81 million in 2015. The system’s total 2016 operating revenues were $12 billion compared to $11 billion in 2015. Sutter Health posted $252 million in investment income and changes in net unrealized gains and losses from investments classified as trading in 2016, compared to ($142) million the prior year. Sutter Health’s combined 2016 income from the day-to-day operations of its hospitals, care centers and other services was $370 million, compared to $287 million in 2015.
Community-Based Investments to Improve Access to Health Care
Sutter Health invested $972 million in new facilities and lifesaving technology throughout Northern California in 2016—extending its total investment to nearly $10 billion during the last 10 years. Most notably, Sutter Health’s California Pacific Medical Center continues to take shape in San Francisco with two new and innovative hospitals that will meet current seismic regulations. One is in the city center at Van Ness and Geary, the other is in the Mission District at Valencia and Cesar Chavez. Additionally, Sutter Health continues to facilitate access to physician clinics through construction projects in multiple communities, including Alameda, Contra Costa, El Dorado, Placer, Sacramento, San Francisco, San Mateo and Santa Clara counties.
“We are proud that more patients and their families trusted us with their care in 2016, and we are grateful for the opportunity to serve our communities,” said Sutter Health President and CEO Sarah Krevans. “We continued our commitment to care for the poor, we were able to invest more in lifesaving technology and updated facilities, and we focused on how innovation can improve care.”
Care for the Underserved
Like many hospitals and health care networks across the state, Sutter Health received reimbursements from the Hospital Fee Program in 2016, which decreased its total Medi-Cal and community benefit investment. In 2016, Sutter Health received net reimbursement of $222 million, compared to $113 million in 2015. The Hospital Fee Program imposes fees to hospitals by the State of California that are matched with federal funds and then funds are distributed back to the State of California. This program helps hospitals offset the costs for expanding services to the most vulnerable population. And, since the implementation of the Affordable Care Act, greater numbers of previously uninsured people now have health care coverage through the Medi-Cal program.
The payments for patients that are covered by Medi-Cal does not cover the full costs of providing care. In 2016, Sutter Health invested $388 million more than the state paid to care for Medi-Cal patients—compared to $712 million during 2015. Medi-Cal accounted for 19 percent of Sutter Health’s gross patient service revenues in 2016, compared to 20 percent in 2015. Sutter Health hospitals care for more Medi-Cal patients in our Northern California service area than any other system.
Sutter Health’s total investment in community benefit in 2016 was $669 million, compared to $957 million in 2015. This amount includes traditional charity care and unreimbursed costs of providing care to Medi-Cal patients, as well as investments in health education and public benefit such as community clinics and prenatal care for low-income patients.
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