Cleveland Clinic reports $1.25B net loss for 2022

Higher expenses and investment losses contributed to Cleveland Clinic’s shaky financial performance in 2022.

The Ohio-based organization reported a $1.25 billion net loss in 2022, compared with a $2.21 billion gain in 2021, according to unaudited results released Wednesday. Operating expenses jumped 13.6%, or by nearly $1.5 billion, to $12.45 billion, including a 13.8% rise in salaries and wages and a 13.7% jump for pharmaceuticals.

More than $1 billion of the loss was tied to Cleveland Clinic’s poor performance in the financial markets.

Annual revenue rose 4.5% to $13 billion.

This past year’s results are a far cry from 2021, when Cleveland Clinic logged its strongest financial year and saw record clinical activity. 

In the fourth quarter, Cleveland Clinic reported net income of $290.12 million, a 45.6% drop from a year ago. Operating expenses increased 8.5% to $3.23 billion, driven by a 6.9% jump in salaries and wages and an 18% increase in pharmaceuticals, among other factors. Quarterly revenue rose 5.5% to $3.53 billion.

Health systems nationwide continue to struggle with an inflationary environment. 

Other nonprofit systems have seen similar results. Oakland, California-based Kaiser Permanente suffered a $4.5 billion net loss in 2022. Last week, Indianapolis-based IU Health reported a $715.11 million loss. Mayo Clinic in Rochester, Minnesota, saw its annual gain drop by almost 60%, although it recorded net income of $2.2 billion for 2022. 

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