Home Industries Health Services Brown Health posts $8.8M operating income in Q2

Brown Health posts $8.8M operating income in Q2

By

Katie Castellani

-

06/10/2025

Rhode Island Hospital — BROWN UNIVERSITY HEALTH posted an $8.8 million operating income in the second quarter of fiscal year 2025, which ended on March 31. Pictured is Rhode Island Hospital, which is operated by Brown Health. / COURTESY BROWN UNIVERSITY HEALTH

PROVIDENCE – Brown University Health posted an $8.8 million operating income in the second quarter of fiscal year 2025 that ended March 31, according to unaudited financial documents released Tuesday. While this marks an improvement over the $4.6 million operating income posted in the second quarter of 2024, it’s down from the $17.7 million the

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PROVIDENCE – Brown University Health posted an $8.8 million operating income in the second quarter of fiscal year 2025 that ended March 31, according to unaudited financial documents released Tuesday. While this marks an improvement over the $4.6 million operating income posted in the second quarter of 2024, it’s down from the $17.7 million the health system reported in the first quarter of 2025. The health system’s Rhode Island operations reported $29.8 million in operating income, while its Massachusetts facilities posted a $21.1 million loss for the quarter. This is the second 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. Management attributed the loss in Massachusetts largely to struggles with bringing patient volumes back up to where they were before Steward filed for bankruptcy in May 2024. Meanwhile, Brown Health's Rhode Island facilities saw better patient volumes, service and payor mixes, as well as boosts in the retail and contract pharmacy operations. However, higher volumes and rising inflation led to increased operating expenses. Net income for the period was $10.7 million, compared with $27.6 million reported in the same period last year. This drop is mainly because of a decline in investment income, according to management. The health system saw a nearly $23 million drop in investment income, which was slightly offset by improvements in nonservice periodic pension costs. Drops in investment income also caused non-operating gains to plummet to just under $2 million, down from last year’s $23 million. Revenue for Brown Health’s Rhode Island facilities was $923.8 million, up from the $846 million reported in the same period last year. Revenue for the Massachusetts facilities was $164 million, with $157.6 million coming from patient service revenue. Patient service revenue for Rhode Island rose to $764.5 million, a $57.2 million increase over last year’s $707.2 million. A 1.3% increase in discharges in Rhode Island boosted patient service revenue by $20.8 million and a change in payor mix and rates increased it by $24 million during the quarter. Other revenues in Rhode Island rose to $113.5 million in the quarter, compared with $87.7 million reported in the same period last year. Operating expenses for the Massachusetts facilities totaled $185.1 million during the quarter. This includes $89.9 million in compensation and benefits, $57.9 million for supplies and other expenses, as well as $21.1 million spent on purchased services. Brown Health’s operating expenses in Rhode Island jumped to $893.9 million during the quarter, up from last year’s $841.4 million. This was mainly driven by increases in spending on compensation and benefits and supplies and other expenses. Brown Health spent $531.7 million on compensation and benefits in Rhode Island during the quarter, compared with $505.2 million reported last year. This was driven by spending on operating and contract labor full-time equivalent employees, growth in physician support and changes in fringe benefits, as well as a rise in self-insured health costs. Supplies and other expenses at Rhode Island facilities totaled $250.9 million, up from the previous year’s $229.2 million. This rise is mainly because of growth in the retail and contract pharmacies. Brown Health had a $19.3 million increase in net assets during the most recent quarter, compared with a $56.7 million rise in net assets reported the same period last year. This drop was mainly because of a decline in gains on investments, which fell to just under $2 million during the period, compared with last year’s $28.7 million. Cash and cash equivalents fell by $129.6 million during the quarter, a sharp decline from the $63.5 million increase reported during the same period last year. Last year’s rise in cash and cash equivalents was bolstered by funds from one-time items. But the drop this year was mainly because Brown Health reported $332.8 million in proceeds from the issuance of long-term debt during the second quarter of 2024, while there was none recorded during the 2025 second quarter. During the second quarter of 2024, Brown Health – then known as Lifespan Corp. – issued a $300 million bond for construction and renovation of its facilities. On May 6, Saint Anne’s and Morton hospitals issued $416.8 million in taxable and tax-exempt debt, part of which was used to repay short-term borrowings. During the quarter, the Massachusetts facilities reported 3,807 discharges and an average length of stay of 5.7 days. The Rhode Island hospitals reported 14,370 discharges and an average length of stay of just over six days. A spokesperson for Brown Health was not immediately available to answer Providence Business News' questions on the financial performance. Katie Castellani is a PBN staff writer. You may contact her at Castellani@PBN.com.