CLEVELAND, Ohio —Buffeted by inflation and the rising cost of providing health care, four of Northeast Ohio’s health systems ended 2024 with budget shortfalls.
MetroHealth System, Summa Health, University Hospitals and Southwest General Health Center all saw financial losses in 2024.
Of those hospitals, UH reported the largest operating loss of $142 million. That came after operating losses of $256 million in 2023, and $302 million in 2022.
“Unfortunately, inflation, along with other rising labor and supply costs, resulted in a loss last year, which we anticipated,” said UH chief financial officer Bradley C. Bond. “We remain committed to delivering compassionate, cutting-edge care while we continue to navigate challenges locally, nationally and throughout the healthcare industry.”
For Southwest General and UH, it was the third year in a row of deficits.
However, the Cleveland Clinic posted a surplus of $980 million in 2024.
“The improved operating performance in 2024 resulted from a 10% increase in operating revenues, supported by strong patient demand for both inpatient and outpatient services,” said Dennis L. Laraway, executive vice-president and chief financial officer at the Clinic.
Summa Health weathered an operating loss of $8 million in 2024, an improvement over its 2023 shortfall of $43 million.
In 2024, MetroHealth had a net loss of $4.6 million, due in part to increases in uncompensated care, inflation and the ongoing staffing shortage, a spokesperson said.
A contributing factor for the medical system’s revenue shortfall in 2024 was low occupancy at MetroHealth’s $42 million Behavioral Health Hospital in Cleveland Heights.
“The behavioral center has been a little bit of a drag for us,” MetroHealth board vice chair John Moss said at a February board meeting. “Its occupancy rate is approximately 43% now, although that’s up from 35%.”
The occupancy rate is fluctuating because hospital leaders realized that patients experiencing mental health crises needed private rooms, said spokesperson Will Dube. To address this, the behavioral hospital’s double occupancy rooms are being converted to single rooms.
In March, the facility had a capacity of 70 and housed about 50 patients. After the conversion is finished this fall, the hospital will have 89 rooms, Dube said. It originally was designed to have 112 beds when it opened in 2022.
Southwest General Health Center, a 354-bed hospital in Middleburg Heights, has experienced three straight years of operating losses, but continues to provide high-quality care, the health system said.
Southwest General did not supply specific financial numbers for 2024, pending an audit.
“The cost of providing healthcare services is rising at a much higher rate than the reimbursement we receive for those services,” said Southwest General CEO William A. Young, Jr. “To improve our financial situation, we have adopted a performance improvement plan to enhance revenue, grow services and improve operating efficiency.”
Several factors contribute to financial losses throughout the healthcare industry, here and across the nation, said Summa Health chief financial officer Dawn Ahner.
Health systems, including Summa Health, continue to experience increased costs, including supply chain and labor costs, insufficient payer reimbursement and increased administrative burdens placed on hospitals by health insurance companies, Ahner said.
Across the country, hospitals that did well financially in 2024 say they are well-managed and efficient, while hospitals that lost money often complain they’re underpaid, said Alan Sager, professor of health policy and management for Boston University School of Public Health.
“These claims are hard to assess,” Sager said.
In reality, some hospitals do well because they have a high percentage of patients with private insurance, which typically offers higher reimbursements than do Medicare or Medicaid, he said.
Hospitals must pay salaries high enough to attract and retain nurses and other skilled workers, Sager said. Staffing costs can be as much as 65% of a hospital’s expenses.
“The crazy thing is, the country is spending this year six times as much on health care as we spend on defense. Up to half the money is wasted on paperwork, high-priced drugs and treatments that have very low clinical value, theft, fraud and other problems,” Sager said.
Looking ahead, hospitals across the county could face even more economic challenges next year.
The threat of trade tariffs still looms. If the economy goes into recession, rising unemployment would cause more people to lose health insurance coverage through their jobs, creating barriers to accessing health care.
If the discussed federal and state cuts to Medicaid happen, medical systems with high numbers of Medicaid patients could have fewer patients to treat as those people postpone routine tests and other care.
“Some hospitals that are closer to the edge financially could get pushed into bankruptcy,” Sager said.
Here is a snapshot look at some Northeast Ohio hospitals’ financial pictures:
University Hospitals
Despite the yearly operating loss, UH reported a net income, including investment earnings, of $18 million, which improved over 2023’s net income by $67 million.
UH operating expenses increased due to higher labor costs, the cost of pharmaceuticals and other patient care supplies, the medical system said.
“University Hospitals continues to be the trusted hometown provider of care in Northeast Ohio,” chief financial officer Bond said. “That is demonstrated by the fact that we increased our operating revenue by more than half a billion dollars last year and saw a 14% in new patient visits. That’s why we’re opening new operating rooms at Ahuja and building a regional cancer hub at TriPoint, among other investments.”
The health system also spent 2023 and 2024 building a next-generation network of urgent care clinics. By 2026, it expects to have 36 UH urgent care centers across northern Ohio, located in high-traffic retail centers.
MetroHealth System
MetroHealth did see revenue gains from increases in in outpatient and inpatient volumes, surgeries and emergency department visits in 2024, hospital spokesperson Dube said.
MetroHealth plans to expand its footprint and find ways to cut costs in the future, Dube said. These include emphasizing employee recruitment and training medical assistants to free nurses for other tasks, he said.
Additional services include a new pharmacy in Brooklyn that opened this year and new midwifery services through its birthing center. MetroHealth’s Outpatient Health Center, formerly called Apex, is scheduled to open in early 2026 on its main campus off West 25th Street.
“These facilities will support continued financial health and further enhance the benefits we provide to patients and the community,” Dube said.
Summa Health
In 2024, Summa ended the year with an $8 million loss, but that was much less than the $43 million loss that ended 2023. Financial numbers for 2022 were not immediately available.
Summa remains the market leader in its region, although it faces competition from other large healthcare providers in the broader Northeast Ohio market, according to a report from FitchRatings, which provides credit ratings and research on businesses. Most of its patients come from areas with flat or declining populations, which means fewer people for Summa to serve, FitchRatings said.
Summa announced in 2024 it would become a wholly owned subsidiary of Health Assurance Transformation, a new business venture owned by venture capital firm General Catalyst.
The $485 million deal, subject to regulatory approval, will likely be finalized in mid-2025. Summa is the largest employer in Summit County with more than 7,000 employees.
Southwest General Health Center
While 2024 numbers were not made available, in 2023 Southwest General had $21.6 million in operating losses, an increase from the operating loss of $12.4 million the previous year.
Six communities near the hospital — Berea, Brook Park, Middleburg Heights, Olmsted Falls, Strongsville and Columbia Township — help support Southwest General through a property tax.
Tax levy receipts were $900,000 in 2023, an increase from $861,000 in 2022, the hospital system said.
“As we move forward, our focus continues to be on strengthening the hospital’s operational efficiency, upholding our commitment to safe, high-quality care and strategically positioning Southwest General for long-term growth and success,” said Albert Matyas, vice president, ambulatory operations and business development.
Southwest General’s smaller size makes it especially susceptible to market developments, such as increased labor costs and trends emphasizing outpatient sites, according to Moody’s Ratings, which publishes credit ratings and assessments of corporations and institution’s debt obligations.
Kelly Linson, who was Southwest General’s vice president chief financial officer since 2020, according to LinkedIn, recently left that position, the hospital said. An interim CFO will be in place shortly.
Cleveland Clinic
The Clinic served more patients in 2024 than in 2023.
In 2024, inpatient admissions increased 2%, total surgical cases increased 4% and outpatient evaluation and management visits increased 5% compared to 2023, the health system said.
Despite having a strong financial year in 2024, at the start of the new year the Clinic cut its administrative staff by 114 positions due to financial challenges. The cuts affected administrative manager positions in various non-clinical areas across the organization.
Julie Washington covers healthcare for cleveland.com. Read previous stories at this link.
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