Home News Story Lifespan posts $8.6M operating profit in fiscal 2023

Lifespan posts $8.6M operating profit in fiscal 2023

By

Katie Castellani

-

12/07/2023

Rhode-Island-Hospital — LIFESPAN CORP. closed out fiscal 2023 in the black, reporting an $8.6 million operating gain, according to financial reports filed Dec. 7. / COURTESY RHODE ISLAND HOSPITAL

PROVIDENCE – Lifespan Corp. closed out fiscal 2023 in the black with an $8.6 million operating income that marks a dramatic improvement over the health system’s $56 million operating loss last year, according to unaudited financial reports filed Thursday. Including nonoperating gains and losses, Lifespan posted a fiscal 2023 net gain of $37.3 million, up

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PROVIDENCE – Lifespan Corp. closed out fiscal 2023 in the black with an $8.6 million operating income that marks a dramatic improvement over the health system’s $56 million operating loss last year, according to unaudited financial reports filed Thursday. Including nonoperating gains and losses, Lifespan posted a fiscal 2023 net gain of $37.3 million, up from a $186.8 million net loss reported in 2022. This improvement was boosted by a $6.9 million operating gain for the three-month period ending Sept. 30. That compares to a $1.2 million operating loss for the same fourth-quarter period last year. Lifespan reported an overall $7.3 million net loss for the quarter, due in part to $10.8 million in investment losses. That was still an improvement over the $44.9 million net loss for the same period last year. Adjustments within the health system’s value-based care models and revenue from Lifespan Retail and Contract Pharmacies aided in a 32.5% increase in other revenue for the quarter, compared with the same period last year. Also, patient service revenue rose 9.6% in 2023, marking a $227.9 million increase over 2022. This is largely thanks to a 5.3% increase in discharges that result in an additional $166.1 million in patient service revenue. Lifespan’s total operating expenses grew by $224.2 million in 2023 – marking a 7.8% increase over 2022 – this is primarily because of a $131.5 million increase in spending on compensation and benefits, as well as a $90.4 million rise in spending on supplies and other expenses, according to the unaudited financial reports. Increases in spending on compensation and benefits as well as supplies and other expenses were also the main forces behind the $51.1 million increase of total operating expenses for the fourth quarter 2023 compared with the same period last year. Operating full-time employees increased by 461 in 2023, resulting in an additional expense of $62.3 million because of rises in the amount of time worked, overtime and different temporary pay incentive programs that were implemented to offset staffing shortages. While there were 23 more full-time contract employees, contracted costs fell by $9.7 million because of lower average rates paid during the year, according to the report. Additionally, higher use of fringe benefits led to a $22 million increase in Lifespan’s self-insurance health and dental benefit expenses in 2023. The rise in supplies and other expenses in 2023 was associated with $32.3 million higher drug costs at the Lifespan Retail Pharmacy and Contract Pharmacy. The report attributed the $52.5 million increase of all other medical or surgical supplies and drug costs to inflation and a 5.9% increase in adjusted patient days. On the other hand, nonoperating gains were $28.7 million in 2023, compared with nonoperating loss of $130.8 in 2022. Nonoperating losses were also narrowed to $14.2 million in the fourth quarter, compared with a $43.7 million nonoperating loss in the same period the prior year. Additionally, Lifespan saw its total net assets increase by $132.1 million in 2023, compared to a $235.1 million decrease in 2022. This improvement was partly aided by Lifespan’s portfolio returning a 10% gain in 2023, compared with a 13.7% loss in 2022. This resulted in $88.7 million in net and unrealized gains in 2023 compared with $229 million losses in 2022. Overall, Lifespan’s volume levels were consistent when compared to 2022 aside from a few exceptions. Some of these included a 17.7% increase in clinic visits and 14.2% drop in office visits during the quarter ended Sept. 30, compared with the same period last year. There was also a 14.6% increase in ambulatory surgeries in 2023 compared to 2022. Katie Castellani is a PBN staff writer. You may contact her at Castellani@PBN.com.