After seeing multiple years of operating losses, Cleveland-based University Hospitals returned to the black in 2025, recording an operating income of $191.8 million (2.6% operating margin, up from an operating loss of $172.6 million (-2.7% margin) in 2024.
“During our darkest period, from 2022 to 2024, we accumulated over half a billion dollars in operating losses on a continuing operations basis,” University Hospitals CFO Bradley Bond told Becker’s. “Finally turning a corner and producing a profit was very satisfying for us.”
University Hospitals saw its operating revenue grow by 14.6% to $7.3 billion in 2025, while its expenses grew by 8.7% to $7.1 billion.
Mr. Bond said several factors contributed to the system’s turnaround. One was the revenue cabinet, which drove stronger-than-expected revenue performance in 2025.
“All that the revenue cabinet is focused on is getting paid fairly for the work we do,” he said. “It’s not focused on growing volume; those are other initiatives. It is solely focused on getting paid fairly for the work we do. We are not overcharging. We are not undercharging. We want to document and we want to code appropriately. And we were able to improve that much with the help of Epic.”
Another was the expense cabinet, which eliminated about $100 million in costs in 2025. Mr. Bond said much of that came from eliminating waste. It also came from eliminating premium pay that was tied to policies left over from the pandemic and were no longer needed. University Hospitals also reduced nursing staff turnover.
“But overarching all this, we started to reconfigure how we operate that business and that is going to be a multi-year journey, but we’re really in a culture change here and reconfiguring how we operate to adapt to the environment we’re facing,” Mr. Bond said.
The system also saw patient volumes increase in 2025; that trend manifested in general and notably in high-acuity areas.
“We had growth in some providers, particularly in surgical and other specialties,” he said. “Our length of stay at the academic medical center dropped dramatically, allowing more throughput, therefore our surgeries went up.”
Overall, the system’s net patient service revenue grew 10.9% to $6.5 billion.
Mr. Bond said UH Ventures — its innovation and commercialization arm — was another success story in 2025. Included within UH Ventures is the system’s home-care unit, which previously operated at a loss annually. Now, the system has optimized the labor structure and optimized throughput and the ability to take discharges from its hospitals into home care. This helped reduce length of stay and returned that unit to profitability. The biggest gain from within UH Ventures came from its pharmacy unit, which saw $96 million in revenue growth.
University Hospitals was also aided by improved state directed payments in 2025, but with financial headwinds looming from HR 1, Mr. Bond said he is guiding the organization to live without them.
“I’m constantly showing the organization life with and without and making the point we need to drive continued gains,” he said. “So starting at the top, we’re changing the culture, which of course is not easy to do, but we’re changing it to one of accountability and purpose.”
For example, he said on alternating Thursdays, revenue and expense cabinet meetings are held and attended by the system’s top C-suite leaders. Those coming to present at the meeting know they have the attention of the leaders atop the organization.
He said leaders are also fostering transparency in the financial reporting — acknowledging one-time items and items they believe are going away — and aligning caregivers “around the needs to protect the system’s mission.
“Our mission is to heal, to teach, to discover,” he said. “We’re connecting that mission to a sustainable financial profile. “If we don’t have a sustainable financial profile, we can’t support the mission.”
The system is now focused on sustaining gains amid ongoing policy and reimbursement uncertainty.
“We’re very proud of our year,” Mr. Bond said. “We took a very brief period to celebrate that, and now it’s on to addressing all the concerns of the future and continuing this pathway we’re on.”
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