Temple University Health System reports $64 million operating loss, first one since 2014

Temple University Health System reports a $64 million annual operating loss, its first since 2014, due to lack of COVID-19 aid.

Temple University Health System recently released its annual financial results for the fiscal year that ended on June 30, revealing a significant operating loss of $64 million. This marks the first time since 2014 that the North Philadelphia health system has reported an annual operating loss.

What makes these financial results particularly noteworthy is that they are the first in three years that do not include substantial COVID-19 aid from the federal government. Over the past three years, Temple University Health System had received a total of $204.4 million in federal aid, which played a crucial role in its operating profit.

Temple officials have refrained from providing any comments on the matter until after a scheduled conference call with investors on Wednesday at 1 p.m. However, it is essential to analyze the factors that contributed to this wide swing to an operating loss.

One significant factor is the increase in expenses for outside agency staff and overtime. These higher costs have put a strain on the health system's financials. Additionally, there has been a 6% decrease in the number of inpatients at Temple's hospitals, excluding Chestnut Hill Hospital. This decline in patient admissions has also impacted the financial performance of the health system.

It is worth noting that Temple University Health System recently acquired Chestnut Hill Hospital from Tower Health in January as part of a joint venture with Redeemer Health and Philadelphia College of Osteopathic Medicine. However, since the acquisition, Chestnut Hill Hospital has reported an operating loss of $12.4 million from January through June.

Despite these challenges, Temple University Health System reported annual revenue of $2.65 billion, representing a 3.8% increase from the previous fiscal year. In fiscal 2022, the health system had an operating profit of $70 million, which included $40 million in federal relief funds.

Overall, these financial results highlight the impact of the absence of substantial COVID-19 aid on Temple University Health System's operating performance. The increase in expenses and the decrease in patient admissions have contributed to the operating loss. It remains to be seen how the health system will address these challenges and navigate the path towards financial recovery.

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