Main Line Health’s loss rose to $125 million in fiscal 2023 after federal COVID-19 aid ended
The nonprofit health system blamed losses on low reimbursement from Medicare and payments from insurers that have not kept up with inflation.
Main Line Health reported a $125 million operating loss in the year that ended June 30, up from $102 million the year before. The financial loss widened this year with the absence of $23 million in federal COVID-19 aid.
The nonprofit, which owns four acute care hospitals in Philadelphia’s western suburbs, would have reported four straight years of operating losses without the help of $79 million in federal aid in fiscal 2021.
Main Line, which had $2.2 billion in revenue last year, attributed its financial difficulties to treating an increasing number of patients with Medicare, the federal government’s insurance program for people 65 and older. The Main Line system historically benefited financially from a relatively large percentage of patients with better paying private insurance.
“Last year, Medicare and Medicaid patients comprised 65% of our cases. Yet the reimbursement rates from these government payers remain well below the cost of care,” Main Line CEO Jack Lynch said in a statement.
“Reimbursements from commercial payers are failing to keep up with inflationary pressures as well, with surging costs of drugs, supplies and labor creating significant challenges. There do not appear to be any immediate changes on the way that would address this reimbursement problem,” Lynch said.
Operating losses have cut significantly into Main Line’s financial reserves. Before the pandemic, Main Line had enough unrestricted cash and investments to cover expenses for 317 days, even if it collected no more revenue. At the end of June, that figure was still strong at 229.
By contrast, Tower Health, with about the same amount of revenue as Main Line, reported just 40 days of cash on hand at the end of June.
Main Line owns Bryn Mawr Hospital, Paoli Hospital, Lankenau Medical Center, and Riddle Hospital. Additional facilities include Bryn Mawr Rehabilitation Hospital, and Mirmont Alcohol Rehabilitation Center.