Cleveland Clinic is the latest not-for-profit health system to weather a loss due to the COVID-19 pandemic.
The Cleveland, Ohio-based system reported a $201.8 million operating loss in the second quarter of 2020, an 8.6% loss margin, compared with $116.2 million in operating income, a 4.4% margin, in the prior-year period. That was due to 11.7% less revenue and a 0.3% uptick in expenses.
The not-for-profit health system reported $2.3 billion in revenue in the quarter ended June 30, compared with almost $2.7 billion in the prior-year period. It said the revenue decline was because of the suspension of non-essential procedures between mid-March and May 4 during the pandemic. Net patient service revenue fell by almost 24%, with acute admissions down 18.3% and surgical cases down 39.2%.
The clinic also said it recognized $274.6 million in federal relief grants in the second quarter of 2020.
The slight uptick in expenses, to just under $2.4 billion in the 2020 period, was due to higher supply costs and other expenses related to preparing for the pandemic. The system said it has worked to lower expenses by suspending annual pay increases for caregivers, restricting travel and reducing purchased service and capital expenses.
Salary and benefit expenses grew 2.7% year-over-year partly due to higher unemployment and defined contribution plan costs. Supply expenses grew 1.5% in that time, which the system said was partly due to obtaining personal protective equipment and scaling up its COVID-19 testing.
On the nonoperating side, favorable investment returns contributed to an excess of revenue over expenses of $276.1 million in the 2020 period, compared with $256.4 million in the prior-year period.