Montefiore Medical Center fell into the red during the first quarter of this year as spending on salaries and benefits for employees pressured its already-tight budget, the hospital’s latest financial statement shows.
The Bronx-based medical center recorded a 0.2% operating loss in the first quarter, according to an unaudited financial statement it released last week. Montefiore lost $3.5 million as costs for salaries, benefits and medical supplies outpaced earnings, despite continued government funding to help the hospital stay afloat, the document shows.
Montefiore earned $1.4 billion in total revenue between January and March, up 6% from the same time period in 2024, its financial statement shows. Though an increase in patient service revenue contributed to the bump, the hospital’s earnings were also bolstered by government funding. Other revenue, an earnings category that includes government aid, doubled from last year to reach $96 million during the first quarter, largely stemming from a $50 million payment through a Medicaid pilot program known as the 1115 waiver. The program has helped prop up Montefiore’s finances in previous quarters.
Though overall revenue increased in the first quarter, the hospital also experienced a 6% jump in expenses, the statement shows. Total expenses reached $1.4 billion in the first quarter, driven by an 8% increase in wage costs as Montefiore ramped up hiring of full-time staff to reduce reliance on contract labor, the hospital said. Montefiore also increased its spending on benefits by 11% to comply with union contract requirements.
Montefiore’s recent losses are on par with last year. But the hospital could face greater deficits if the federal government passes legislation overhauling Medicaid and Medicare payments, as 85% of its patient population gets insurance coverage through government health plans, according to the medical center.
House Republicans passed legislation earlier this month that includes significant payment changes for hospitals and other health care facilities, and state officials estimate that federal funding losses could exceed $13.5 billion. The changes could also upend health coverage for 1.5 million New Yorkers – a phenomenon that may leave hospitals with the unpaid bills of the uninsured. The legislation must also pass the U.S. Senate.
Potential hits to Medicare and Medicaid have led hospitals to cut costs in advance. Colleen Blye, Montefiore’s chief financial officer, said the health system is exploring opportunities to reduce expenses and attract patients with alternative types of insurance as it navigates the uncertain funding environment.
A spokesperson from Montefiore did not answer a question from Crain’s about what cost-cutting initiatives are on the table, or whether it is considering workforce reductions.
