Baptist Health of Little Rock reported an operating loss of $15.7 million in 2024, as the state’s largest health care system saw expenses rise and pandemic relief funding end.
Baptist Health had a $89.4 million operating income in 2023, which was boosted by the receipt of $103.5 million in COVID-19 assistance during the year, according to its financial statements on file with the Municipal Securities Rulemaking Board of Washington, D.C. In 2024, the nonprofit health system didn’t receive any pandemic relief.
Brent Beaulieu, the system’s chief financial officer, told Arkansas Business that the pandemic relief funds were important for Baptist Health during the public health emergency that ended in May 2023. The government money helped offset the increased costs that Baptist Health incurred related to COVID-19, he said.
“I was thankful that [the loss last year] wasn’t worse, but it’s definitely not at a level that long term is sustainable,” Beaulieu said.
Meanwhile, Baptist Health’s patient service revenue rose to $1.94 billion in 2024, compared with $1.8 billion in 2023. The 2024 numbers are unaudited, but the 2023 figures are audited.
Some of the revenue increase was tied to Baptist Health’s acquisition of Drew Memorial Health System in Monticello in December 2023, Beaulieu said. The hospital was renamed Baptist Health Medical Center-Drew County, and is the system’s 12th hospital in the state.
The system also added services, and partnered with the University of Arkansas for Medical Sciences to open a cancer clinic and infusion center on the campus of Baptist Health Medical Center-Little Rock in 2023.
Baptist Health also received about a 4% increase from government and commercial payers for services. “We did get a higher than normal increase that we’ve had during my time here,” Beaulieu said.
But the bump in reimbursement rates still isn’t enough. Beaulieu said he’s been spreading the word about how low reimbursement rates are for Arkansas hospitals compared with nearby states and the rest of the nation.
A 2024 study by the Rand Corp., a nonprofit, nonpartisan research organization, showed that nationally the median rate paid by commercial insurers for hospital inpatient and outpatient services was 254% of the rate paid by Medicare in 2022, according to a news release from the Arkansas Center for Health Improvement. Historically, commercial payment rates were generally higher than those by Medicare, the news release said. But Arkansas’ commercial payment rate for hospital services was 164% of the rate paid by Medicare, making Arkansas one of five states with commercial insurance rates that were less than 200% of Medicare, ACHI said.
Baptist Health’s expenses also increased in 2024 to $2.1 billion, up from $1.95 billion the previous year. Some of the increased expenses were tied to adding the Drew County hospital. In addition, Baptist saw increases in the costs of wages and supplies, Beaulieu said.
Baptist Health also invested in several pilot programs, one of which involves using computer models to help manage staffing. Baptist Health is “constantly doing some innovations, and some of that expense was tied up in some things like that,” he said.
For this year, Baptist Health has budgeted a 1.2% margin. “Our long-term target is to be a 3%” margin, Beaulieu said. “That’s what’s necessary to pay your debt and to maintain reasonable savings and to be able to update and keep your facilities current and up-to-date.”
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