Sutter Health Posts 2023 Audited Financial Statements
Mar 7, 2024
Sutter Health
Sutter Health logo in teal with white background

SACRAMENTO, Calif.,—Sutter Health’s (Sutter) audited financial statements for 2023 show the integrated health system is in a healthy financial position, due in large part to an increase in the number of patients cared for by Sutter care teams across California. The organization ended 2023 with $320 million in operating income and an operating margin of 2%, which helps put the 100-year-old, not-for-profit system in a good position to deliver on its comprehensive plans over the next decade to continue to invest in expanding care for more patients, as well as upgrading facilities, technology and equipment.

“Sutter Health is laser focused on enhancing access to high-quality, equitable care to meet California’s growing demand,” said Warner Thomas, president and CEO for Sutter Health. “I am incredibly proud of all of our employees, our leaders and our medical groups for the strong operational performance and significant progress we achieved in 2023, which creates continued opportunity to invest to meet patient demand.”

All revenue Sutter Health generates is invested back into the community to expand access to care and improve the well-being of the regions we serve. In a new chapter for the organization, Sutter Health set a bold strategy for the not-for-profit system in 2023 to serve more patients, make it easier for them to access and navigate care and find new ways to help them get well and stay well.

In 2023 Sutter announced a $1 billion ambulatory care expansion to open more than two dozen new ambulatory care centers to bring services closer to patients over the next three years. Examples of capital projects completed in 2023 include the opening of the Sutter Health Ambulatory Care Center and Surgery Center in San Jose and Sutter Davis Hospital’s expansion, which added more space to its Family Birth Center, Emergency Department, helipad and medical-surgical unit. Several other projects to expand care capacity, including expanding inpatient care across three hospitals, are now in flight.

Other work to expand care capacity initiated in 2023 included recruiting more than 700 new physicians and clinicians, a record number for the system. Additional plans are underway to further expand graduate medical education programs. We currently train nearly 200 resident and fellow physicians annually and plan to increase that number to 1,000 by 2030. These programs are in addition to other ongoing clinical training programs and academic partnerships designed to widen the clinical talent pipeline as a reliable source to help the system deliver innovative, equitable and culturally competent care. And the organization has reduced employee turnover across the organization by 5% since 2022 where it now sits below the national average.

Sutter will also continue to invest in digital innovations with the goal of making healthcare simpler, easier to navigate and more accessible to patients’ schedules and circumstances.

2023 Financials – Additional Context

Sutter cared for more people in both inpatient and outpatient settings last year, and Sansum Clinic, a 103-year-old, not-for-profit outpatient health care organization based in Santa Barbara, joined Sutter Health, adding its network of ambulatory and multi-specialty care centers in California’s Central Coast to the integrated system.

Similar to other health care providers, Sutter continued to experience inflationary cost pressures in key areas like wages, benefits, supplies, drugs and food, which outpaced the rate of reimbursement increases from governmental and commercial payers.

Sutter’s positive operating performance in 2023 was also coupled with positive yields of $679 million on its investment portfolio, which provide Sutter with the ability to replace equipment, invest in new technologies and expand access to care in communities across Northern and Central California.

Continued Investments in Our Communities

Community benefit investments were $822 million in 2023. 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 most recent impactful community benefit investments included funding a school-based health clinic for students in Sacramento and supporting the expansion of a new facility operated by a federally qualified health center in Oakland.

As part of Sutter’s not-for-profit commitment to serving vulnerable populations, Sutter provided $84 million in charity care in 2023. Sutter’s care sites offer charity care to provide medically necessary care to eligible patients, regardless of their ability to pay. Sutter’s annual community benefit investments also include unreimbursed costs to care for patients with Medi-Cal due to reimbursements not covering the full cost of care. In 2023, Sutter invested $532 million more than the state paid to care for patients with Medi-Cal.

Sutter Health and Affiliates – 2023 Financial Results:

Sutter Health 2023 Financial Results
Dollars in millions
2023 2022
Total revenues $16,130  $14,773
Total expenses 15,810 14,495
Income from operations 320 278
Nonoperating income (loss):
Investment income (loss), net 679 (448)
Gain (loss) on consolidation and deconsolidation 48 (208)
Other components of net periodic postretirement costs 123 209
Total nonoperating income (loss), net 850 (447)
Net income (loss) 1,170 (169)
Income attributable to noncontrolling interests (92) (80)
Income (loss) attributable to controlling interests 1,078 (249)

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