Sutter Health Announces 2005 Financial Performance
SACRAMENTO, Calif., April 14 -- The Sutter Health network of doctors, hospitals and other health care service providers announced its earnings for 2005. Sutter's 2005 financial performance will allow the organization to continue its various long-term initiatives to advance community access to quality health care services.
Sutter's combined 2005 systemwide income from the day-to-day operations of its hospitals, care centers and other services was $334 million, compared to $320 million in 2004. Sutter Health achieved an additional $108 million in investment income, bringing total 2005 net income (including investment income) to $442 million, an increase of $14 million from 2004 total net income of $428 million. Sutter Health's total revenues were $6.7 billion in 2005, compared to $6.3 billion in 2004.
Sutter Health leaders welcomed the positive financial results. "We continue to make significant commitments to our many communities in the form of new programs, facilities and technology," said Sutter Health President and CEO Pat Fry. "Maintaining strong financial health and achieving our earnings goals are critical in keeping this important work on track."
As a not-for-profit community-based organization, Sutter Health reinvests all the earnings it achieves into the preservation and improvement of local health care services.
During 2005, Sutter incurred $929 million in costs related to providing care and services for the poor and underserved and benefits for the broader community, or nearly 15 percent of net patient and capitation revenue. This investment includes the cost of providing charity care, the unpaid costs of participating in public programs including Medi-Cal and Medicare, and investments in medical research, health education and community-based public benefit programs such as school-based clinics and prenatal care services. As a result of an expanded charity care policy implemented throughout the Sutter Health system in early 2004, Sutter's cost of providing charity care has continued to grow. Charity care costs grew from $42 million in 2004 to $59 million in 2005. Sutter's charity care costs have more than doubled since 2003.
In March, Sutter Health announced that it plans to invest approximately $6.6 billion - $1.7 billion more than it originally envisioned in 2002 - to improve, replace or build dozens of Northern California community-based outpatient care centers and hospitals over the next ten years. In the years since leaders from around the Sutter Health network worked together to create the system's comprehensive approach to facility master planning, the health care environment has seen sweeping changes. New competitors and innovations have emerged, hospital construction costs have soared, outpatient trends have outpaced projections and Sutter embarked on a new strategic plan. These leaders refined the organization's plans to ensure they balanced community needs, the realities of the changing environment, and the goal of remaining healthy, viable and successful over the long term.
The health care system also continued its aggressive investment in patient-oriented information technology in 2005. Work continued on development of a systemwide paperless electronic health record (EHR). Installation of barcoding technology to improve hospital medication delivery safety also progressed. Barcoding systems are currently in place at 10 Sutter hospitals, and others will implement the technology as part of the comprehensive EHR system. In addition, Sutter Health expanded its electronic intensive care unit efforts by connecting eight more hospitals and bringing to 16 the total number of facilities with this life-saving support system. Nine remaining hospitals are expected be connected in 2006.