Ascension squeaked into the green during a volatile quarter in which COVID-19 surges fueled choppy volumes, deferred electives and greater operational costs.
For the three months ended Sept. 30 (the first quarter of Ascension’s fiscal year 2022), the faith-based nonprofit reported $6.9 billion in total operating revenue, $6.4 billion of which was net patient service revenue. This was up from the $6.6 billion and $6 billion it logged during the same quarter last year.
However, Ascension only saw $25 million in operating income for the most recent quarter, well below the $143 million it brought in during the year prior. These represented an operating margin of 0.4% and 2.2% for the first fiscal quarters of 2022 and 2021, respectively.
Some of the differences can be attributed to government pandemic funding, the system’s management wrote. Ascension recognized roughly $4 million in Provider Relief Fund revenue during the first quarter of 2022, “representing a significant decrease from the $185 million … recognized during the respective quarter of the prior fiscal year.”
RELATED: Ascension latest nonprofit to rebound with $5.7B net income for 2021
Other factors playing into the drop are the result of the system’s volume trends and operating expenses.
For the former, Ascension saw an uptick in COVID-19 cases as well as a continuation of category-specific recovery from pandemic lows. Year over year, the system reported increases in equivalent discharges (1.9%), admissions (2.3%), emergency room visits (18.2%), urgent care visits (32.2%) and clinic visits (5.9%). Surgery visits, on the other hand, were down 3.8% “largely driven by lower inpatient surgeries,” while virtual provider office visits fell 29.5%.
“Our system experienced the second-highest inpatient census for COVID patients since the onset of the pandemic,” wrote Ascension management, which noted the impact was largely felt within its southern markets. “Localized intermittent COVID-related restrictions also resulted in the cancellation or deferral of elective procedures at certain times in select markets throughout the quarter.”
Total operating expenses for the quarter increased $419 million (6.4%) year over year to $6.9 billion, with the system pointing to incremental pandemic-related salaries, wages, employee benefits, purchased services and supply expenses as contributors. Cost per equivalent discharged increased 4.5% for the quarter as COVID-19 increased the average length of stay.
RELATED: Ascension, AdventHealth are breaking up Amita Health, their 19-hospital joint system
Ascension said it provided $562 million in uncompensated care during the quarter. As of Sept. 30, it is sitting on 325 days of cash on hand.
Ascension is among the country’s largest health systems, employing roughly 145,000 associates alongside 40,000 aligned providers. It operates over 2,600 sites, including 141 hospitals, across 19 states and Washington, D.C.
Although still reporting a gain, the St. Louis-based system was hit harder by delta surges and expense increases than some of its fellow nonprofit providers such as CommonSpirit and Mayo Clinic. Providence, however, reported a $311 million loss as reimbursement wasn’t able to keep pace with COVID-19 stressors.