Advocate Aurora Health skimmed through a tough quarter with a 0.3% operating margin, yet the organization ultimately reported a loss of $253.2 million for the three months ended March 31, 2022.
The 27-hospital nonprofit brought in $2.5 million in operating income from roughly $3.6 billion in total revenue and expenses.
The system had logged an operating income of about $64 million, a 2% operating margin, during the first quarter of 2021.
The most recent quarter’s total revenue was a 9.1% increase over the prior year while expenses rose 11% year over year.
The increase in revenue was largely due to a 10.1% bump in patient service revenue, which the system attributed to increased outpatient (6.3%) and physician (6.7%) visits compared to the previous year’s opening quarter.
Total expenses, on the other hand, were dragged by a 13.4% year-over-year rise in salaries, wages and benefits expenses and an 8.4% increase in supplies, purchased services and other expenses. Contributors to these areas cited by Advocate Aurora included higher patient volumes, higher nurse agency costs and supply purchases in anticipation of a newly implemented enterprise resource planning system.
As seen among its fellow nonprofits, Advocate Aurora’s choppy operations during the quarter were dragged down further by a rough investment market.
The system saw its nonoperating income dip from a $316.5 million gain in the first quarter of 2021 to a $245.1 million loss in the most recent quarter. Whereas Advocate Aurora had brought in $295.7 million during the earlier quarter, it reported a net loss of $266 million.
The end result was a net loss of $253.2 million one year after pulling in a $351.8 million profit, according to the filing.
Advocate Aurora was formed in 2018 from the merger of nonprofits Advocate Health Care and Aurora Health Care. It treats 2.6 million unique patients, employs 75,000 people and logged just under $14.1 billion in total revenue during all of 2021 and a net income of more than $1.8 billion.
The system could be reporting substantially larger numbers by this time next year should its recently unveiled merger with Atrium Health receive the all-clear from regulators.
That deal, which Advocate Aurora said in its quarterly report is expected to close before the end of 2022, would yield a six-state, 67-hospital juggernaut with more than $27 billion of combined revenues.