Mass General Brigham Reports 2024 Financial Results

Mass General Brigham, a not-for-profit, integrated health care system, today reported its financial results for fiscal year 2024 (FY24), which ended on September 30, 2024. Excluding $118 million revenue that pertains to prior year activity, the health system generated a loss from operations of $72 million in FY24 (-0.4% operating margin). This compares with a loss from operations of $48 million (-0.3% operating margin, excluding $143 million prior year revenue) in fiscal year 2023 (FY23).

As has been well-documented, an unrelenting capacity crisis is straining resources for health care organizations across the commonwealth. Sicker patients presenting at Emergency Departments has led to overcrowding and results in academic medical centers (AMCs) treating a disproportionate percentage of patients for primary and secondary care needs, which reduces bed capacity for more advanced care, a trend which is happening across the national health care landscape. A shortage of nonacute care beds has exacerbated the capacity crisis as patients remain in beds across AMCs and community hospitals longer than typically necessary. These challenges continue to curtail revenue growth.

Prolonged inflation has also contributed to ongoing financial challenges, particularly given the sustained nature of continued inflationary surges on labor and supply costs. While annual increases for these costs have slowed, several years of elevated cost increases relative to modest annual increases in reimbursement rates in a capacity-constrained environment has resulted in persistent financial impact.

Mass General Brigham is responding to these challenges through a sustained focus on resource stewardship, organizational integration to improve patient access, initiatives to reduce length of stay to improve throughput and quality of care, getting patients access to the right beds through a new Patient Transfer and Access Center, and by working to diversify revenues through the commercialization of innovations and growth of the Mass General Brigham Health Plan. Together, these initiatives are aimed at maintaining the system’s strong commitment to its four-part mission, despite continued capacity and inflationary related pressures.

“Our commitment to our mission is unwavering, despite persistent external pressures that continue to increase the financial fragility of health care providers across Massachusetts. We have been diligent in promoting a culture of responsible resource stewardship, improving access, quality, and patient outcomes by reducing length of stay and streamlining patient transfers, and developing initiatives to generate diversified sources of revenue,” said Anne Klibanski, MD, President and CEO of Mass General Brigham. “As we look ahead to 2025, we will maintain a strong commitment to patient care, research, education, and improving the health of our communities — with a particular focus on supporting our frontline clinicians — while continuing to find new ways to recalibrate the trajectory of our revenue and expense growth rates to ensure long-term financial sustainability.”

Inclusive of $118 million in revenue related to prior year health care provider activity, Mass General Brigham reported income from operations of $46 million in FY24. The system recognized total operating revenue of $20.6 billion in 2024, an increase of $1.7 billion (9%) over 2023. Patient care revenue grew to $13.4 billion, an increase of $647 million (5%). Ongoing efforts to coordinate systemwide capacity management resulted in an average acute care inpatient length of stay of 6.0 days, a 1% decline from 2023, and contributed to growth in discharges (3%).

The system also recognized $2.2 billion in health plan premium revenue (43% increase, reflecting an influx of MassHealth members under an Accountable Care Organization that launched in April 2023), $2.9 billion in research and academic revenue (7% increase) and $2.0 billion in other revenue (13% increase).

“Operating for several years in a capacity-constrained and cost-inflationary environment has contributed to a very challenging situation for our and many other health systems. Our response has included an intense focus on cost management while pursuing new sources of revenue, but ongoing headwinds continue to temper the pace of our progress,” said Niyum Gandhi, Chief Financial Officer and Treasurer of Mass General Brigham. “We remain committed to supporting our four-part mission as we focus on initiatives to close the revenue and expense growth gap.”

Operating expenses totaled $20.5 billion, an increase of $1.8 billion (9%) over 2023, reflecting increases in wages and benefits ($605 million or 6%), medical claims ($418 million or 39%, related to the increase in health plan membership), and costs and use of pharmaceutical ($335 million or 22%) and other clinical ($105 million or 9%) supplies.

In 2024, the system absorbed $868 million in Medicaid and Health Safety Net shortfalls due to certain government reimbursements that do not cover the full cost of providing care to low-income and uninsured patients, an increase of $28 million (3%) compared with the shortfall absorbed in 2023. Mass General Brigham also invested approximately $713 million to support its community health ($207 million), research ($223 million) and education ($283 million) programs. Collectively, these mission-related initiatives comprise approximately 8% of Mass General Brigham’s total FY24 operating revenue.

The system reported an overall gain of $2.0 billion in 2024, including a nonoperating gain of $2.0 billion. 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 2023 the system reported an overall gain of $1.2 billion, including a nonoperating gain of $1.1 billion.

Commitment to our four-part mission

As an academic health care system, Mass General Brigham has a four-part mission: to provide exceptional patient care, to drive innovation through groundbreaking research and discovery; to educate the next generation of health care professionals; and to improve the health of the communities we serve.

To advance this mission, the organization undertook a wide range of initiatives in 2024, including:

• Strategies to drive world-class patient care: Mass General Brigham’s single strategy for quality, For Every Patient, was launched in 2024, with a focus on delivering the best possible outcomes through safe, effective, equity-informed, personalized care. As part of this strategy, teams are measuring improvements in outcomes that are driven by best-in-class practices and a high reliability approach to quality improvement. This year, five Mass General Brigham Hospitals were once again named among the top hospitals in the nation by U.S. News & World Report. In addition, Mass General Brigham Health Plan was ranked number one in member satisfaction among commercial health plans in Massachusetts by J.D. Power for two years in a row, including the new category of most trusted.

• Evolving our organization for the future: This year, Mass General Brigham made significant progress toward integrating our system to become the most impactful, patient-focused and equitable academic health care system in the world with the highest quality research-infused care that dramatically improves outcomes and experiences for all we serve. This includes the naming of single department leaders who will unite our academic departments at Massachusetts General Hospital and Brigham and Women’s Hospital, to enable enhanced patient access and enhanced collaboration on groundbreaking research and world-class education, with fourteen single chairs named to-date. The system also launched a forward-looking vision for Mass General Brigham Cancer with the goal of meeting and shaping trends in the cancer care landscape, and made progress in unifying Heart and Vascular expertise with the naming of a single leader to unite those teams across the system.

• Groundbreaking research: Mass General Brigham’s global leadership in groundbreaking research and discovery was on display with major research milestones, including the naming of Gary Ruvkun, PhD, an investigator at Massachusetts General Hospital, as the recipient of the 2024 Nobel Prize in Physiology or Medicine for his role in the discovery of microRNA and its role in post-transcriptional gene regulation. In addition, a breakthrough study that showed “dramatic and rapid” regression of glioblastoma after next-generation CAR-T therapy. Demonstrating the broad expertise across the organization, more than 80 researchers across Mass General Brigham were named to the annual Highly-Cited Researchers 2024 list from Clarivate.

• Support for the health of our community: Though its unified community health strategy, Mass General Brigham is targeting investments that address key social determinants of health that represent the biggest drivers of inequities. This past spring, Brigham and Women’s Faulkner Hospital awarded $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. Later, Massachusetts General Hospital awarded $18 million to 22 local organizations to support affordable housing in Greater Boston, part of a total investment of $62 million in community health funds, the largest in Massachusetts history. This work builds on Mass General Brigham’s direct engagement in the communities we serve through programs like our Community Care Vans, which launched an updated fleet in February and have expanded initiatives like a maternal health program to provide support to new mothers at home.

Fourth Quarter Financial Results

The system generated operating losses of $113 million (-2.2% operating margin) and $66 million (-1.4% operating margin, excluding $99 million prior year health care provider activity) in the fourth quarter of 2024 and 2023, respectively. Inclusive of onetime revenue, the system reported $33 million income from operations in the 2023 fourth quarter.

Excluding $99 million of prior year revenue recorded in the 2023 quarter, total operating revenue increased $360 million (7%) to $5.2 billion for the three months ended September 30, 2024. This reflects increases in net patient service revenue ($98 million, 3%), premium revenue ($26 million, 5%), research and academic revenue ($64 million, 9%) and other revenue ($172 million, 41%; excluding $99 million prior year revenue). Total operating expenses increased $407 million (8%) to $5.3 billion, reflecting increases in wages and benefits ($157 million, 6%), supplies and other expenses ($147 million, 11%), medical claims ($38 million, 10%) and depreciation and interest ($6 million, 3%).

The system reported an overall gain of $383 million for the three months ended September 30, 2024, including a nonoperating gain of $496 million. In the comparable 2023 period the system reported an overall loss of $41 million, including a nonoperating loss of $74 million.