Sutter Health Posts 2022 Audited Financial Statements
Mar 23, 2023
Sutter Health

SACRAMENTO, Calif.—Sutter Health posted its audited financial statements for 2022. The integrated health system experienced increased operating revenues last year due in large part to the hard work and dedication of employees, physicians and clinicians providing high-quality care to our patients. It ended 2022 with $278 million in operating income.

However, increases in expenses and changes in unrealized net gains and losses on investments negatively impacted Sutter’s overall financial performance that resulted in a loss of $249 million for 2022.

“Our operating financial performance has put Sutter in a position to reinvest more within the system, which can help support even higher quality, equitable healthcare for patients throughout California,” said Warner Thomas, president and CEO for Sutter Health, who joined the system in the fall of 2022 after a comprehensive nationwide search.

A Closer Look: 2022 Financials in Greater Context

In 2022, Sutter continued efforts started in 2021 to help the organization recover financially from the pandemic and from some longstanding industry challenges. Meanwhile, more patients started returning to care centers across the system to access Sutter’s high-quality care, with patient volumes returning to near-2019 levels by year’s end. Together these actions provide the organization a stable base to invest in the future.

Sutter’s operating performance could not completely offset other factors such as $578 million in net unrealized gains and losses on investments. There was a large, year-to-year swing in investment income—from $758 million in 2021 to $130 million in 2022. And like other healthcare organizations around the country, Sutter continued to experience inflationary pressures that resulted in increases in key expenses such as wages and benefits, and supplies.

“We are encouraged by the system’s operational performance that allows us to reinvest and implement our plan for addressing challenges such as inflationary headwinds and increased costs,” said Brian Dean, chief financial officer for Sutter Health.

Care for the Underserved

Community benefit investments increased by $27 million from $872 million in 2021 to $899 million in 2022. This amount includes traditional charity care and unreimbursed costs of providing care to Medi-Cal patients, as well as investments in community health programs to address prioritized health needs as identified by regional community health needs assessments. Some of Sutter’s impactful community benefit investments last year included the Lotus Behavioral Health Crisis Center in Placer County, the 711 Post St. Shelter in San Francisco, the Gregory Bunker Care Transitions Center of Excellence in Sacramento, the Salvation Army’s Senior Program in Stanislaus County and the LINKS program in Merced County.

  • As part of Sutter Health’s commitment to fulfill its not-for-profit status and assist in serving the most vulnerable in its communities, Sutter Health’s care sites, along with other associated healthcare providers, offer charity care policies to ensure that patients can access needed medical care regardless of their ability to pay. Sutter’s charity care policies, which have been in place for many years, offer financial assistance to uninsured and underinsured patients earning less than 400% of the annually adjusted Federal Poverty Level. In 2022, Sutter invested $82 million in charity care.
  • Overall, since the implementation of the Affordable Care Act, greater numbers of previously uninsured people now have more access to healthcare coverage through the Medi-Cal and Medicare programs. The payments for patients who are covered by Medi-Cal and Medicare do not cover the full costs of providing care. In 2022, Sutter invested $615 million more than the state paid to care for Medi-Cal patients.
  • Examples of Sutter’s regional prioritized health needs include access to basic needs and primary care services, as well as mental health and substance use care.

Focused on Growth

In 2022, Sutter’s capital investments totaled $463 million, with projects including expansion work at Sutter Davis Hospital and a new three-story patient tower at Sutter Santa Rosa Regional Hospital offering 40 new beds. Moving forward, Sutter Health will be focused on expanding patient access. The Sutter Health Board of Directors recently approved investments to build additional ambulatory care centers across Northern California over the next several years. Deeper investment in digital technology will also be made to better integrate care across all settings and make it easier for patients to access and navigate the Sutter system and remain connected to their care teams.

Sutter will also work to retain and recruit the best talent available to support its patients, which is particularly important as the industry grapples with workforce shortages. By expanding recruitment teams, streamlining talent management processes and offering market-leading compensation packages, Sutter will compete to attract and retain strong talent. Sutter plans to grow its physician and clinical training programs, academic partnerships and graduate medical education programs to expand its talent pipeline and ensure it can continue to provide innovative, equitable and culturally competent care to its patients and communities into the future.

“We’re writing a new chapter for Sutter Health with a bold strategy to change healthcare in Northern California by making care more accessible to more patients,” said Thomas. “Sutter Health strives to be a place where people most want to work and practice medicine, the place more patients choose to come for high-quality care that is easy to access and navigate, and the place communities know will help solve problems and invest in their health and well-being.”

See more about how talented and driven teams across Sutter Health help deliver high-quality, safe and compassionate care to more than 3 million people in one of the U.S.’ most diverse, dynamic and innovative regions in Sutter’s 2022 Annual Report.

Sutter Health and Affiliates – 2022 Financial Results, Continued

Sutter Health 2022 Financial Results
Dollars in millions
2022 2021
Operating Revenues $14,773  $14,225
Operating Expenses 14,495 14,026
Income from Operations 278 199
Investment Income 130 758
Change in net unrealized gains and losses from investments (578) 122
Other components of net periodic postretirement cost 209 142
Loss on deconsolidation of affiliate (208)
(Loss) Income (169) 1,221
Less income attributable to noncontrolling interests (80) (83)
(Loss) Income attributable to Sutter Health (249) 1,138
Capital Investment $463 $378


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