Northwell Health increased its profits from last year, boosting its operating performance as health systems statewide prepare for looming cuts to federal health funding.
The New Hyde Park-based health system recorded a $292 million operating surplus and a 1.6% margin last year, increasing gains by nearly $100 million compared to 2023, according to a yearly financial statement released Tuesday. Northwell’s total revenue was more than $18.6 billion in 2024, $16.5 billion of which came from patient services rendered in its 21 hospitals and more than 900 ambulatory clinics and physician practices.
The health system also saw a bump in other revenue, which includes pharmacy sales, laboratory sales and grants, including nearly $200 million in federal Covid-19 relief grants last year, financial documents show.
Northwell’s operating gains come as the health system expands its reach outside New York; it completed its merger with Nuvance Health on May 1, adding seven hospitals in the Hudson Valley and Connecticut to its network, which now consists of 28 hospitals. The merger is “promising” for Northwell’s finances because it boosts the system’s negotiating power with the state and other health care payers as health systems face potential federal funding losses, said Dr. Ge Bai, a professor of accounting and health policy at Johns Hopkins University in Baltimore, who reviewed Northwell’s financial statement.
“They are vulnerable to turbulence,” Bai said, noting that Northwell’s relatively thin margin puts it at risk because of potential termination of federal research grants or shifts to Medicare or Medicaid payments.
Barbara Osborn, deputy chief public relations officer at Northwell, said that the health system’s performance reflects strategic growth and expense management, as well as continued pressures of the labor market and insurance denials.
“We remain focused on operational efficiency and strategic growth strategies, which are expected to continue driving positive operating results as we prepare for the expected headwinds related to the potential federal funding changes,” Osborn said.
Northwell Health accrued $18.3 billion in expenses last year, most of which covered salaries and benefits for its roughly 90,000 employees. The health system spent a combined $11.6 billion on wages and benefits in 2024, up almost 8% from the previous year because of cost-of-living adjustments, Northwell noted in the management’s discussion of its financial statement.
Though the health system’s operating performance improved from last year, Northwell recorded fewer net assets because of a dropoff in investment income, according to its financial statement. The health system recorded $597 million in investment gains in 2023 – a significant portion of its net assets – but gains dropped to $264 million last year, the statement shows.
