Ascension Health closed its 2022 fiscal year with an $879.1 million operating loss and net loss of more than $1.8 billion, according to investor disclosures for the period ended June 30.
A nearly $2.1 billion rise in operating expenses and $1.2 billion in net losses from investments drove the 144-hospital system’s poor performance, according to the financial documents.
The losses are a turnaround from the previous year’s $676 million operating income and almost $5.7 billion net gain.
Volumes and revenue both saw slight increases over the previous year’s numbers, the Catholic system wrote.
For the former (all on a same-facility basis), equivalent discharges rose 1.3% from fiscal 2021 to 2022, according to the documents. But while total admissions and surgery visits declined 0.8% and 1%, measurements of outpatient volumes such as emergency room visits and urgent care visits rose 13.4% and 37.9%.
Total operating revenue rose by $738 million, or 2.7%, year over year. Much of that was driven by a $753 million increase in net patient service revenue “despite the continued impact of the pandemic surges that resulted in less surgical and procedural volumes and more medical cases,” management wrote.
Ascension’s 7.8% year-over-year increase in total operating expenses translated to an 8.2% increase in cost per equivalent discharge.
“Consistent with the overall healthcare provider industry,” the system’s total salaries, wages and benefits headlined the expense increases. These costs rose $1.2 billion (9.1%) year over year.
Supply expenses rose $110 million (2.7%). Purchased services increased by $306 million (10.3%) while other operating expenses grew by $465 million (7.2%) “due primarily to an increase in cost of goods sold.”
Together, the Catholic system saw its operating margin fall from fiscal 2021’s 2.5% to -3.1%.
Ascension’s investments, which comprise the majority of its non-operating items, “experienced significant volatility” through the year and most notably during the spring. Compared to last year’s almost $5.9 billion net investment return, the system recognized over $1.2 billion during fiscal 2022.
Ascension’s cash on hand declined from 336 days to 259 days year over year. The system said it provided $2.25 billion in care to persons living in poverty and other community benefits, up slightly from the prior year’s $2.14 billion.
Ascension, which employs 139,000 staff across 2,600 sites of care, has no shortage of company in the red. Recent months’ expense and investment challenges have hung heavy over major nonprofit names like Cleveland Clinic, Providence, Mass General Brigham and Sutter Health, all of which reported operating and net losses during their most recent quarters.