Sutter Health Announces 2000 Financial Performance

SACRAMENTO, Calif., April 21, 2001 — Sutter Health, one of Northern California's leading not-for-profit health care networks, announced that 2000 systemwide income from the day-to-day operations of its hospitals, physician care centers and other services was $35 million, compared to $2 million in 1999. Investment income of $55 million, along with $21 million in revenue from the sale of real estate pushed Sutter's 2000 total operating income to $111 million, compared to $51 million in total operating income, including investment income, in 1999. As a non-profit organization, Sutter Health reinvests any earnings in equipment, services and facilities. Sutter Health's total system wide revenues for 2000 were $3.5 billion compared to $2.9 billion in 1999.

During 2000, Sutter Health spent $305 million on services for the poor and underserved and on benefits for the broader community, up from $218 million in 1999. This represents more than nine percent of Sutter's net patient revenues for the year, and includes charity care, the unpaid costs of participating in public programs including MediCal and Medicare, and also includes investments in medical research, health education and community-based public benefit programs such as school-based clinics and prenatal care services.

Sutter Health's 2000 earnings were short of its target of three-to-four percent of total revenue before investment income. "We have been making steady and consistent progress since our 1996 merger, but we remain concerned about the continued underfunding of the health care infrastructure in California," said Robert Reed, Sutter Health Chief Financial Officer. He said Sutter Health is facing expenses of approximately $550 million to bring its hospitals into compliance with state-mandated seismic safety regulations.

One of the nation's leading non-profit networks of community-based health care services, Sutter Health serves more than twenty Northern California counties, from the Oregon border to the San Joaquin Valley, and from the Pacific coast to the Sierra foothills. Sutter medical centers care for more inpatients than any other network in Northern California, and are the regional leaders in infant deliveries, neonatology, orthopedics, pediatrics and cancer care services.

Sutter Health has care centers in more than 100 Northern California cities and towns; more than two dozen acute care hospitals; physician training programs, medical research facilities, region-wide home health, hospice and occupational health networks; and long term care centers. Sutter's hospitals and care centers have relationships with approximately 5,000 physicians and employ more than 30,000 people.