Mount Sinai Hospital posted a 1.6% operating margin in 2023, staying in the black despite continued expense growth, recently published financial statements show.
The Upper East Side hospital brought in $3.9 billion in total revenue in 2023, up 7% from the previous year, according to financial documents released Wednesday. Revenue gains were largely attributed to an uptick in earnings from patient care; hospital services brought in $3.5 billion in 2023.
Mount Sinai also reported $269 million in other revenue, which includes earnings from cafeteria sales and parking lots.
Despite its positive margin, Mount Sinai Hospital’s operating surplus was down significantly from the 5.1% margin it posted in 2022. Expense growth contributed to the decline; the hospital reported $3.9 billion in total costs in 2023, up 11% year-over-year.
“Like many other health systems and businesses, [Mount Sinai Health System] continues to face challenges with expense growth, due to inflation, a tight labor market, and payroll pressure,” hospital management said in financial documents.
Wages and benefits made up half of the hospital’s total expenses; it spent $1.5 billion on employee salaries and $428 million on benefit packages. Both wages and benefits rose more than 10% from 2022.
Supply expenses, which include medical equipment and pharmaceuticals, rose 10% year-over-year and cost the health system $1.7 billion in 2023.
The hospital’s assets also took a $385 million hit last year, in part because it continued to transfer money to cover the losses of Beth Israel Medical Center on the Lower East Side, according to its financial statement. Mount Sinai announced its plan to shutter Beth Israel’s main campus last summer, and wrote off more than $200 million to fill the hospital’s deficits in 2023.
Mount Sinai pledged to close Beth Israel’s main campus by July 12, citing the hospital’s losses as unsustainable. Following pushback from the Health Department on its plan and requests for additional information about its closure, Mount Sinai has doubled down on the July closure date.
“Simply put, the Mount Sinai Health System cannot continue to offset the growing Mount Sinai Beth Israel losses without threatening the operational sustainability of the entire MSHS system,” said Loren Riegelhaupt, a spokesperson for Mount Sinai. Adding that Beth Israel is not financially sustainable, he said “we must close it as quickly as possible to preserve the system.”
Mount Sinai Hospital has more than 1,100 beds. The facility is a part of Mount Sinai Health System, which includes eight hospitals, an ambulatory care network and the Icahn School of Medicine on the Upper East Side.
Amanda D'Ambrosio , 2024-05-31 11:33:03
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