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.