Sutter Health Financial Performance

The Sutter Health network of doctors, hospitals and other healthcare providers announced its financial performance for 2017. Income attributable to Sutter Health for 2017 was $893 million, compared to $554 million in 2016. The system’s total 2017 operating revenues remained consistent with 2016 at $12 billion. Sutter Health posted $651 million in investment income and changes in net unrealized gains and losses from investments classified as trading in 2017, compared to $252 million the prior year. Sutter Health’s combined 2017 income from the day-to-day operations of its hospitals, care centers and other services was $326 million, compared to $377 million in 2016.

Dollars in millions

A stable financial position gives Sutter Health the opportunity to further expand community access to high-quality healthcare. Sutter Health invested $924 million in new facilities and lifesaving technology throughout Northern California in 2017—extending its total investment to nearly $10 billion during the last 10 years.

Sutter Health’s California Pacific Medical Center construction continues to make progress in San Francisco with two new and innovative hospitals that will meet current seismic regulations. One is in the city center,  known as the Van Ness and Geary campus; the other is located at Valencia and Cesar Chavez, known as the Mission Bernal campus, and is scheduled to open in August. Additionally, Sutter Health continues to facilitate access to clinics through construction projects in multiple communities, including Alameda, Contra Costa, Sacramento, San Francisco, San Joaquin, Santa Clara and Sonoma counties. The healthcare system is also planning for the next round of seismic upgrades, as defined by the Office of Statewide Health Planning and Development for 2030, as well as completing Americans with Disabilities Act upgrade requirements already underway at existing facilities throughout its network.

Sutter Health continues to innovate safe, high-quality care delivery outside of hospital and clinic walls to meet consumer needs for convenience, flexibility and efficiency—from telemedicine-aided specialist consultations and walk-in care clinics—all with an eye toward helping reduce healthcare costs, too. Sutter Health also invested $57 million in research and development in 2017, supporting efforts addressing heart failure, breast cancer and diabetes management, to name a few.

“We are honored by the patients and families who placed their trust in us for high-quality care in 2017. We appreciate the opportunity to serve them and our communities throughout Northern California,” said Sutter Health President and CEO Sarah Krevans. “In 2017, we maintained our commitment to care for the poor, invested more in lifesaving technology and updated facilities, and introduced approaches that can create new front doors to improved, more personalized care.”

Sutter Health’s total investment in community benefit in 2017 was $612 million. 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 programs such as community clinics and prenatal care for those with low income.

Like many hospitals and healthcare networks across the state that care for Medi-Cal patients, Sutter Health received reimbursements from the Hospital Fee Program in 2017. Sutter Health received net reimbursement of $432 million in 2017, which included program reimbursement from prior years as well, compared to $222 million in 2016. 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 California hospitals. This program helps hospitals offset the costs for expanding services to the most vulnerable population. This additional reimbursement did decrease 2017’s total Medi-Cal and community benefit investment. Overall, since the implementation of the Affordable Care Act, greater numbers of previously uninsured people now have healthcare coverage through the Medi-Cal program.

The payments for patients who are covered by Medi-Cal do not cover the full costs of providing care. In 2017, Sutter Health invested $334 million more than the state paid to care for Medi-Cal patients. Medi-Cal accounted for 19 percent of Sutter Health’s gross patient service revenues in 2017, which was the same percentage rate in 2016.

See more about how Sutter Health reinvests into the community by visiting sutterpartners.org.