Mass General Brigham Reports Second Quarter 2024 Financial Results

Mass General Brigham, a not-for-profit, integrated healthcare system, today reported income from operations of $30 million (0.6% operating margin) for the second quarter of fiscal year 2024, which ended on March 31, 2024. In the second quarter of fiscal year 2023, the system reported a loss from operations of $6 million (-0.1% operating margin).

“At Mass General Brigham, we are committed to ensuring that we deliver on our four-part mission of outstanding patient care, groundbreaking research, world-class education, and strong support for the communities we serve. Despite ongoing financial pressures, we are making progress to ensure our financial stability, which will enable us to invest in our mission today and for years to come,” said Anne Klibanski, MD, President and CEO of Mass General Brigham. “At the same time, we are investing in our people and beginning a process to combine the power of our outstanding academic medical center departments, to enhance collaboration, improve patient access and navigation, and enhance the research-infused care that sets us apart.”

The system generated total operating revenue of $5.1 billion in the second quarter of fiscal year 2024. Patient care revenue grew to $3.3 billion, an increase of $165 million (5%) over the 2023 second quarter. Ongoing efforts to coordinate systemwide capacity management facilitated a 2% reduction in the average acute care length of stay to 6.1 days and 7% growth in discharges. Outpatient activity also contributed to revenue growth.

The system also generated $570 million in health plan premium revenue (134% increase, reflecting an influx of MassHealth members under an Accountable Care Organization that launched in April 2023), $704 million in research and academic revenue (5% increase) and $472 million in other revenue (10% increase, including $3 million in grants from the Federal Emergency Management Agency related to the COVID-19 pandemic).

Operating expenses totaled $5.1 billion, an increase of $537 million (12%) over the 2023 second quarter, reflecting increases in medical claims ($198 million or 111%, related to the increase in health plan membership), wages and benefits ($164 million or 7%), and costs and use of clinical ($24 million or 10%) and pharmaceutical ($92 million or 25%) supplies.

“While our second quarter results demonstrate continued progress toward financial recovery, expense growth remains elevated,” said Niyum Gandhi, Chief Financial Officer and Treasurer at Mass General Brigham. “We are focused on initiatives that will reduce our long-term expense growth trend and enable us to continue investing in efforts that improve patient outcomes and experience to foster healthier communities.”

The system reported an overall gain of $807 million for the three months ended March 31, 2024, including a nonoperating gain of $778 million. Nonoperating activity includes gains and losses on investments and interest rate swaps, which can vary significantly year to year due to volatility in the financial markets, and philanthropic activity. In the comparable prior year period, the system reported an overall gain of $361 million, including a nonoperating gain of $367 million.

Year-to-Date Financial Results

Excluding onetime revenue totaling $116 million relating to prior year healthcare provider activity, the system generated an operating loss of $5 million (-0.1% operating margin). Inclusive of onetime revenue, the system reported income from operations of $111 million.

In the comparable prior year period, the system generated an operating loss of $75 million (-0.8% operating margin). This excludes $67 million in healthcare provider revenue related to prior year activity related to federal transfers connected to the COVID-19 pandemic. Inclusive of onetime revenue, the system reported a loss from operations of $8 million.

For the six months ended March 31, 2024, the system absorbed $1.2 billion in Medicare, Medicaid, and Health Safety Net shortfalls due to certain government reimbursements that do not cover the full cost of providing care to Medicare, low-income, and uninsured patients, an increase of $31 million (3%) compared to the shortfall absorbed in the comparable prior year period.

The system reported an overall gain of $1.4 billion for the six months ended March 31, 2024, including a nonoperating gain of $1.3 billion. In the comparable 2023 six-month period the system reported an overall gain of $841 million, including a nonoperating gain of $849 million.

Making an impact for the patients and communities we serve

Mass General Brigham is also evolving our organization for the future, in service of the patients and communities we serve. In March, Mass General Brigham announced plans to integrate academic medical center departments to enhance collaboration and improve patient access and navigation. The system is also launching a new initiative to invest in and improve clinician experience and wellbeing.

This work, like the process to plan for the future of Mass General Brigham Cancer, is being driven by a process that draws on the insights of faculty and employees across the organization, who are collaborating and designing solutions together.

Additional progress includes:

• Groundbreaking progress in transplantation: In March, Massachusetts General Hospital announced the world’s first successful transplant of a genetically-edited pig (porcine) kidney into a 62-year-old man living with end-stage kidney disease (ESKD). The procedure marks a major milestone in the quest to provide more readily available organs to patients. Mass General Brigham is an internationally recognized leader in transplantation services, providing advanced care for a wide spectrum of organ and tissue transplants throughout its renowned academic medical system.

• New investments in behavioral and mental health: Last month, Brigham and Women’s Faulkner Hospital (BWFH) announced the awarding of $4.5 million in Community Health Impact Funds to eight organizations to support mental and behavioral health initiatives — including substance use disorder — in the Boston neighborhoods of Hyde Park, Jamaica Plain, Roslindale and West Roxbury. Through a deliberative process with BWFH Community Advisory Board members, residents and stakeholders, guided by its 2022 Community Health Needs Assessment, mental/behavioral health was determined to be the funding priority.

• Driving advancements in women’s health: Last month, Governor Maura Healey, Health and Human Services Secretary Kate Walsh, and Economic Development Secretary Yvonne Hao visited Brigham and Women’s Hospital (BWH) to highlight clinical and research capabilities in women’s health there. During the visit, the Governor announced several new grants to support research projects that aim to improve women’s health outcomes. Six Mass General Brigham experts were recipients of these grants. The grants are administered by the Massachusetts Life Sciences Center, including one program that is co-administered by the Mary Horrigan Connors Center for Women’s Health and Gender Biology at Brigham and Women’s Hospital.

• Managing systemwide capacity and maximizing impact of new beds: Ongoing efforts to combat the capacity crisis are supported by new systemwide initiatives like Mass General Brigham’s Patient Transfer and Access Center. By managing transfer requests through a single entry point and eliminating redundancies, the Center has driven a 10% increase in successful transfers to MGH, a 17% increase for BWH, and a 14% increase in successful transfers from Mass General Brigham’s community hospitals to its academic medical centers. This improved efficiency will enhance the impact of a net increase of 94 beds at MGH, after that request was unanimously approved by the Public Health Council last month.

• Driving insights in CAR-T therapy: A collaborative project led by MGH researchers is bringing the promise of cell therapy to patients with a glioblastoma (GBM) has shown dramatic results among the first patients to receive the novel treatment. In a paper published in March in The New England Journal of Medicine, researchers shared the results for the first three patient cases from a phase 1 clinical trial evaluating a new approach to CAR-T therapy for GBM. The new approach is a result of years of collaboration and innovation springing from the lab of Marcela Maus, MD, PhD, director of the Cellular Immunotherapy Program at the Mass General Cancer Center. Studies like this one show the promise of cell therapy for treating incurable conditions. Mass General Brigham’s Gene and Cell Therapy Institute, where Maus is associate head & head of Cell Therapies, is helping to translate scientific discoveries made by researchers into first-in-human clinical trials and, ultimately, life-changing treatments for patients.

Forward-Looking Statements

This press release contains certain “forward-looking statements” concerning financial and operating plans and results which involve known and unknown risks and uncertainties. In particular, statements preceded or followed by, or that include the words, “projects,” “believes,” “expects,” “estimates,” “anticipates,” “plans,” “intends,” “scheduled,” or similar expressions are forward-looking statements. Various factors could cause Mass General Brigham’s actual results to differ materially including, but not limited to the impact of the COVID-19 pandemic, federal and state regulation of healthcare providers, changes in reimbursement policies of state and federal government and managed care organizations, competition in the healthcare industry in our market, general economic and capital market conditions, and changes in our labor and supply costs and in our ability to retain personnel. For more information on these and other risk factors, please refer to our most recent bond official statement or annual disclosure statement filed on the Electronic Municipal Market Access (EMMA) website maintained by the Municipal Securities Rulemaking Board. We undertake no responsibility to update any such forward-looking statements except as expressly required by law.