Advocate Health, the newly formed marriage of major nonprofits Advocate Aurora Health and Atrium Health, reported a $10.4 million operating income (0.1% operating margin) and $578.7 million net gain in its first-ever first-quarter earnings report released Tuesday.
The 67-hospital entity tallied more than $7.54 billion in total revenue during the three months ended March 1 thanks to year-over-year increases across each of its major divisions—Advocate Aurora Health, Atrium Health’s Charlotte-Mecklenburg Hospital Authority and Atrium Health Wake Forest Baptist.
Together, Advocate Health’s operating groups saw 125,500 discharges, 44,600 observation cases, 108,000 total surgeries and 532,200 emergency department visits.
These volumes were generally up from what each division had reported during the prior year’s first quarter, though the reports from Advocate Aurora and Atrium Health Wake Forest Baptist also outlined worsened case mixes.
Total expenses were a hair behind revenue at $6.53 billion, thanks again to organizationwide jumps in total expenses and major line items such as labor and supplies/purchased services.
The six-state organization’s narrow operating margin was also bolstered by a $610.4 million net investment income. Total nonoperating income landed at $584.2 million.
As of March 31, the combined Advocate Health reported $41.92 billion in total assets comprised of $16.87 billion in total liabilities and $24.95 billion in total net assets. The organization said its cash and cash equivalents dipped from $1.44 billion to $1.27 billion over the course of the quarter.
The first-quarter numbers set a baseline for Charlotte, North Carolina-based Advocate Health. The organization came into being as the country’s fifth largest nonprofit health system in early December under the guidance of co-CEOs Eugene Woods of Atrium and Jim Skogsbergh of Advocate Aurora.
Its entities employ more than 150,000 people and serve 6 million patients annually, with annual revenues in the neighborhood of $27 billion. It comprises 67 hospitals and over 1,000 sites of care across Illinois, Wisconsin, North Carolina, South Carolina, Georgia and Alabama and has plans to establish a new institute for health equity based in Milwaukee.
Compared to other major nonprofits’ latest numbers, Advocate Health’s slim-but-positive operating margin places the new behemoth in the middle of the pack.
On one side, Sutter Health, Intermountain Health, Cleveland Clinic and Mayo Clinic each reported positive operations that swelled with higher patient counts. On the other, Catholic giants like Ascension, Providence and CommonSpirit Health have also tallied hundreds of millions in operating losses despite similar increases in care utilization.