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Weak investment markets drive Cleveland Clinic’s income down 30%


Wikipedia Dive Brief:

Nonprofit giant Cleveland Clinic posted operating revenue of $3.1 billion in the third quarter , up 13% year over year as net patient revenue swelled on an influx of patient activity. The Ohio academic medical center’s topline was also helped by higher outpatient pharmacy revenue, as utilization of outpatient and specialty drugs increased.

Many systems reported expense growth sharply outpacing revenue growth in the quarter ended Sept. 30. Cleveland Clinic didn’t buck the trend but mitigated it slightly, as expenses grew 14% year over year to $2.7 billion, with higher patient volumes requiring greater spend on staff and supplies.

Cleveland Clinic’s operating income bumped up slightly to $148 million, though its operating margin of 4.8%, compared to 4.9% same time last year, stayed relatively stable. However, milder investment returns resulted in the nonprofit reporting net income of just $422 million, down 30% year over year.

Dive Insight:

In March 2020, S&P revised its outlook for the U.S. nonprofit healthcare sector from stable to negative due to the threat of the COVID-19 pandemic. The ratings agency changed it back to stable in June this year due to revenue recovery and balance sheet stability, in a bright […]

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