Trinity Health reported earnings of $2.7 billion for the second half of its fiscal year that ended Dec. 31, 2020, a major jump over the $805 million it generated in the same period the year before.
Trinity posted its earnings Friday for the second half of its 2021 fiscal year that started in July 2020. The earnings come amid declines in patient service revenue due to the COVID-19 pandemic. Trinity Health is the latest hospital system to post positive earnings despite patient revenue declines.
The earnings were driven by “strong cost controls, lower operating expenses, as well as improved operating revenue compared to the same period,” Trinity Health's report said. “In addition, strong investment returns drove non-operating gains higher.”
Overall, Trinity posted operating revenue of $10.3 billion for the second half, up nearly 6% from the same period in 2019. Operating income was $710 million, up from the $102 million it generated in the same period the year before.
Operating revenue, though, took a hit, driven by volume declines from the pandemic.
“Year-over-year volumes, as measured by case mix adjusted equivalent discharges, decreased 5% for the six months ended December 31, 2020 compared to the prior fiscal year,” the 92-hospital system said.
While volumes precipitously declined in the spring, Trinity saw a recovery of patient volumes in the months that followed. However, that recovery “was tempered as a result of COVID-19 surges in November and December 2020,” the earnings report said.
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Net patient service revenue for calendar year 2020 was $15.4 billion, a decline of $1 million compared to calendar year 2019.
But the volume declines and any declines due to the payer mix were partially offset by “payment rate increases and improvements in case mix impacted by both COVID-19 patients as well as declines in lower acuity non-COVID-19 volumes,” the report added.
Large hospital chains such as for-profit HCA Healthcare and the not-for-profit Mayo Clinic also posted profits at the end of 2020 thanks to greater access to liquidity and a stable payer mix.
A big factor for all systems, including Trinity Health, was help from a $175 billion provider relief fund created under the CARES Act.
Trinity Health got $1.3 billion from the provider relief fund and $1.6 billion in advance Medicare payments, which, unlike the relief funds, must be paid back to the federal government.
Trinity also was aided by a decline in expenses. The system’s expenses in the second half of fiscal year 2021 decreased by nearly $36 million to $9.6 billion.
The decline was primarily “driven by labor cost controls and lower purchased services and medical claims, partially offset by increased supply costs from the pandemic-related personal protective equipment, lab and drug costs,” the earnings report said.
Hospitals across the country have not only faced increased costs for PPE but also for temporary staff such as travel nurses needed to shore up personnel to fight new surges of the virus.