Cleveland Clinic, University Hospitals post first-quarter financials
For the first quarter of 2021, Cleveland Clinic and University Hospitals each posted operating incomes close to their projections as the health systems emerge from the financial challenges of COVID-19, per recently released financial disclosures.
Cleveland Clinic’s operating income for the first three months of the year was $61.7 million, compared with an operating loss of $39.9 million in the first quarter of 2020.
This was slightly under what the Clinic expected from an operating performance perspective, but it’s not material, said Steven Glass, the Clinic’s chief financial officer. He also notes that the Clinic set its projections last fall prior to the winter surge.
“Revenue was much shorter than what we expected, but the Clinic did a great job of managing expenses relative to the budget, so we’re only slightly behind on the operating margin perspective for the first quarter of the year,” he said.
University Hospitals reported an operating income of $1.4 million for the three-month period ending March 31 this year, compared with a loss of $45.7 million for the like period last year.
Mike Szubski, UH chief financial officer, said the system is off to a good start and is tracking to its expectations.
“We attempted to be a bit cautious about how the recovery would occur for Q1 2021, so we’re at about a break even through the first quarter, and that’s right in line with the plan,” he said.
Szubski said in late June that the second quarter was looking good for UH as well and that the system was ahead of plan.
As for patient volumes, UH’s outpatient numbers have been “robust” — well over what it saw during this time last year, Szubski said, adding that surgical and outpatient procedure volumes are also recovering quite well.
Inpatient activity remains down a bit, though the acuity levels are up with sicker patients in the hospital, likely due in part to delayed care during worsening conditions, he said.
Through the first quarter, the Clinic saw the end of the peak of the winter surge and began moving closer to normal pre-COVID-19 volume levels.
“By the end of the first quarter, we were at single-digit variances from where we were pre-COVID, which is very good, and that has continued to recover since then as well,” Glass said.
Szubski said UH is being thoughtful about its capital spend going forward, and he expects long-term capital planning has already been picking up through the second quarter.
“Again, we will always invest where if there’s a safety concern or a regulatory concern that’s gotta be addressed, we will do that,” he said. “We also have the Ahuja Phase II project going on, and we’re not stopping that. I think that there are just some pockets of opportunity where we’re just being as thoughtful as we can, (and) being cautious with the capital spend.”
Glass said that as the Clinic and other providers think about the fall and winter months coming and with them, flu season, they are urging people to get vaccinated.
“We’re gonna be, before we know it, coming into the fall season. and we just would really love to see everybody take all of the precautions we can. We don’t want to get back to where we were last winter,” Glass said. “So we would just heavily encourage everybody to please think about getting the vaccine. I know there’s some hesitancy out there, but it really has had a huge impact on controlling the spread of this disease across our communities.”