Trinity Health posted $112 million in operating income for the third quarter of the year as patient volumes continue to recover from major dips in March at the onset of the pandemic.
Trinity said in its earnings filed late Monday that the 92-hospital system generated $4.7 billion in operating revenue compared with $4.8 billion in the same quarter in 2019.
The operating income comes as volumes for the system continue to trend below pre-pandemic levels. Systems across the country faced declining volumes at the onset of the pandemic in March and April as governments called for the cancellation and postponement of elective procedures.
Patient volumes for the third quarter were down 5.2% compared to the 2019 quarter, Trinity said.
“Volume declines were partially offset by payment rate increases, improvements in case mix, and to a lesser extent, improvements in payer mix,” Trinity’s earnings report said.
Overall net patient service revenue declined $54.8 million. This was due to $229.2 million from volume declines.
However, that massive decline was offset by $66 million in improvements in the case mix and $12.2 million from improvements in the payer mix. The system was also aided by $36.7 million in earnings from Trinity's Gateway Health Plan.
Another major boon was non-operating gains of $674 million, which can include income from investments and other activities, compared with gains of $83 million during the same quarter last year.
The higher gains were “primarily due to higher investment earnings driven by overall global investment market conditions,” the report said.
Trinity also had luck when it comes to its expenses. Hospitals have faced higher prices for all manner of supplies and pharmaceuticals since the start of the pandemic.
“Expenses for the quarter decreased by $29.7 million, or 0.6%, to $4.6 billion, primarily driven by lower purchased services and medical claims and lower labor expenses partially offset by an increase in supply costs driven by pandemic-related lab and drug costs,” the system said.
Like other health systems, Trinity has been helped by federal relief funding. The system recognized $2.4 million from a $175 billion fund passed by Congress as part of the CARES Act.
Trinity got $1.1 billion in total relief funding from the CARES Act through Sept. 30. It also got $1.6 billion in advance payments under the Centers for Medicare & Medicaid Services’ Accelerated and Advance Payments program. The money, however, must be repaid.
Trinity also plans to defer payment of social security taxes from March 27 through Dec. 31 of this year, with 50% of that deferral amount due on Dec. 31, 2021, and the rest at the end of 2022.
Trinity is the latest hospital system to post positive financial earnings for the third quarter as hospitals continue to try to recover from massive drops in March and April.
Cleveland Clinic recently posted increased operating income and revenue for the third quarter but a loss for the first nine months of the year.
But it remains unclear how the latest surge of COVID-19 will impact the recovery for hospital systems. Some hospitals have started to postpone elective procedures again as cases and hospitalizations mount.
“At this point, [Trinity] cannot estimate the length or severity of the pandemic, which limits the corporation’s ability to forecast the pandemic’s impact on the corporation’s financial position, results of operations or cash flows,” Trinity said.