PROVIDENCE – Despite being disappointed by the Massachusetts hospitals’ fiscal performances in the third quarter, Brown University Health Chief Financial Officer Peter Markell is hopeful those facilities will eventually hit their goals.
“We got a lot of hard work ahead of us,” Markell told investors during a call on the health system’s third quarter results. “We just don’t think it’s going to take care of itself.”
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Brown Health posted a $3.8 million operating loss in the third quarter 2025. While its Rhode Island operations reported a $28.4 million operating income during the quarter, the Massachusetts hospitals posted a $32.2 million loss.
This is the third-consecutive quarter in which the health system has reported earnings for Saint Anne’s Hospital in Fall River and Morton Hospital in Taunton. Brown Health purchased the Massachusetts facilities from Steward Health Care on Oct. 1 for approximately $175 million.
Operating losses for the Massachusetts hospitals spiked by almost 53% since the second quarter 2025, when they reported a $21.1 million loss.
Markell attributed this to lower volume than expected, particularly in the ambulatory care centers. Despite this lower than expected volume, the health system has kept the staff needed for the number of patients they hope to attract.
While this staffing cushion adds to expenses, Markell said the health system is focused on driving patients to its Massachusetts hospitals and care centers. If those volumes don’t show progress over the next few years, then the health system will consider cutting staff to better match patient demands.
But Markell is hopeful, noting that Massachusetts went live on the electronic medical system, Epic, a few weeks ago and that shows promise in boosting efficiency and improving the patient experience.
“We want to be fair and give this a good shot,” Markell said. “When people give you everything they have, you want to be loyal to them too. So, we want to make sure before we do any right sizing we’ve given this the best chance we could.”
Meanwhile, Markell feels good about Rhode Island’s performance.
Brown Health’s Rhode Island operating margins rose by $16.9 million from quarter three 2024 to the same period in 2025. This was bolstered by a $14.4 million growth in profits from the pharmacy program.
Markell said this rise in pharmacy program profits stems from an employee benefits program where workers were given incentives to have their prescriptions filled through Brown Health’s pharmacy. Pharmacy profits are expected to continue growing, but by not as much, moving forward.
Still, Markell raised concerns about what fiscal year 2027 would bring – when he expects to start feeling the full effect of Medicaid cuts included in the “one big beautiful bill” President Donald J. Trump signed in July.
Markell said Brown Health’s leadership are working with Massachusetts and Rhode Island officials to understand how Medicaid enrollment is expected to change.
Katie Castellani is a PBN staff writer. You may contact her at Castellani@PBN.com.
