Ascension latest nonprofit to rebound with $5.7B net income for 2021

Faith-based nonprofit Ascension logged greater revenue and operating income for the year but noted that volumes were consistently disrupted. It credited government funds and investment successes for its ability to sustain services. (Ascension)

Ascension has posted an operating income of $676 million and an investment-buoyed $5.7 billion net income for the fiscal year ended June 30, 2021.

The numbers are a clear turnaround from last year’s results, when the Catholic nonprofit landed more than $1 billion in the red with an operating loss of $639 million.

However, the system’s management noted that COVID-19 pandemic restrictions and consumer hesitancy “continue to have an adverse impact on the system’s overall volumes” during fiscal year 2021.  

“Government funding and favorable investment performance have contributed to the system’s ability to sustain operations during this unprecedented time,” the system wrote in an analysis accompanying its full-year operating results. “Ascension is committed to managing discretionary expenses to focus on top priorities of caring for our patients and caregivers.”

Ascension said that it has received $1.8 billion in Provider Relief Fund distributions across fiscal years 2020 and 2021 but estimates a systemwide COVID-19 impact of more than $1.9 billion.

Total operating revenue for the year came in at $27.2 billion, up from 2020’s $25.3 billion. These yielded operating margins of 2.5% and negative 2.5%, respectively.

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Equivalent discharges and admissions were down 2.2% and 3.1% year over year. Emergency room visits dipped 10.7% from 2020 while urgent care visits plummeted 27.6%.

Ascension did see modest year-over-year volume gains among outpatient visits (3%) and inpatient and outpatient surgery visits (3.3%). Virtual care skyrocketed nearly 60% in the latest fiscal year, landing just shy of 1.5 million total visits.

Like other systems, Ascension’s net profit for the year was boosted nearly $5.9 billion by its net investment return. It had lost over $418 million across its investments in fiscal year 2020.

Also seen across the industry was this year’s increase in total operating expenses. Ascension reported a $972 million (3.8%) year-over-year rise in its overall costs, with a jump in salaries, wages and employee benefits comprising $547 million of that increase (4.3%). Unexpected costs of contract labor also contributed an additional $164 million over fiscal year 2020, while supply expenses leapt $369 million (10.1%).

Ascension said it provided $2.3 billion in uncompensated care and other community benefits during fiscal year 2021. As of the end of June, it is sitting on 341 days of cash on hand.

Ascension employs roughly 150,000 associates and has 40,000 aligned providers. It operates over 2,600 sites, including 146 hospitals, across 19 states and Washington, D.C.

Its numbers for the year fit the trend reported by several other nonprofits. CommonSpirit, Mayo Clinic and Advocate Aurora have each reported a steady, but not full, rebound of volumes and revenue, although others, like Providence and Banner Health, stressed the rising impact higher expenses are having on their bottom lines.