Sutter Health Announces 2008 Financial Performance
SACRAMENTO, Calif., April 9, 2009 - The Sutter Health network of doctors, hospitals and other health care service providers announced its financial performance for 2008. Sutter Health’s combined 2008 systemwide income from the day-to-day operations of its hospitals, care centers and other services was $463 million, compared to $471 million in 2007. Sutter Health also posted a loss of $277 million in investment income and changes in net unrealized gains and losses from investments classified as trading in 2008, compared to a gain of $152 million in 2007. Total income for 2008 was $186 million, compared to $623 million in 2007. The system’s total 2008 revenues were $8.3 billion, compared to $7.7 billion in revenues in 2007.
As a not-for-profit health care organization, Sutter Health reinvests its earnings into programs, services, technology and facilities in the communities it serves. The system also invested *$505 million to fortify the Sutter Health Pension Plan in light of investment losses.
While Sutter’s investment losses in 2008 and an uncertain national economy will require the system to moderate its planned capital spending, Sutter Health intends to commit approximately $1 billion to capital projects in 2009. Major medical center construction projects in Burlingame and Sacramento are well under way, and design and entitlement processes for seismic-replacement hospitals in Oakland and San Francisco are moving forward. Sutter Health is also proceeding with plans to build new hospitals in Castro Valley and Santa Rosa.
During 2008, Sutter provided even more care and services for the poor and underserved and benefits for the broader community. Sutter Health’s 2008 commitment to community benefit was $599 million (compared to **$548 million in 2007) and includes the cost of providing charity care, the unpaid costs of participating in Medi-Cal, and investments in medical research, health education and community-based public benefit programs such as school-based clinics and prenatal care for patients. As a result of an expanded charity care policy implemented throughout the Sutter Health system in early 2004, Sutter’s commitment to providing charity care has grown to nearly $2 million per week. Sutter Health’s traditional charity care contribution increased from **$77 million in 2007 to a record $96 million in 2008.
“Sutter Health enjoyed continued strong operating results in 2008, however, the economic downturn had a negative impact on our investment earnings,” said Sutter Health President and CEO Pat Fry. “We are pleased that Sutter Health’s positive financial performance allowed us to maintain the financial health of our employee pension plan, make record contributions to charity care and community benefit, and commit over $1 billion to capital investments,” he added.
Serving patients and their families in more than 100 Northern California cities and towns, Sutter Health doctors, hospitals and other health care service providers join resources and share expertise to advance health care quality and access. The Sutter Medical Network includes many of California’s top-performing, highest quality physician organizations as measured annually by the Integrated Healthcare Organization. Sutter-affiliated hospitals are regional leaders in cardiac care, women’s and children’s services, cancer care, orthopedics and advanced patient safety technology. For more information about the not-for-profit Sutter Health family, please visit www.sutterhealth.org.
*The amount invested by Sutter Health in its pension plan in 2008 was the IRS maximum deductible contribution. The Sutter Health Retirement Plan is fully funded in accordance with the minimum funding standards of the Employee Retirement Income Security Act of 1974 (ERISA).
**In 2008, Sutter Health adopted the 2008 Edition of the Catholic Health Association’s guidelines to be in alignment with voluntary national community benefit reporting standards. Certain amounts for 2007 have been restated for comparability.
Sutter Health Contact
News Media Line
Hear more about Sutter Health’s 2008 financial performance from Chief Financial Officer Robert Reed:
Robert Reed discusses Sutter Health’s 2008 financial performance( MP3)
Robert Reed discusses Sutter Health’s investment in Northern California (MP3)
Robert Reed discusses Sutter Health’s long-term approach to preserving and improving community access to care (MP3)
Robert Reed discusses Sutter Health’s commitment to caring for patients (MP3)
Audited Financial Statements
2008 Audited Financial Statement (1.5MB PDF)