Ascension continues to notch year-over-year improvements to its financials, recently reporting a $237.8 million operating loss at its fiscal nine-month cutoff as opposed to the nearly $1.8 billion it was down at the same point in 2023.
For the quarter ended March 31, the major nonprofit system logged a $82.6 million operating loss (-1.1% operating margin) but a $580.8 million net gain. Both are improvements over the prior fiscal third quarter’s $1.4 billion operating loss—inclusive of a $715 million one-time impairment loss—and $713 million net loss.
Leaving out the impairment and nonrecurring losses whittled the system’s most recent recurring operations loss down to $25.4 million as opposed to the prior year’s $647.1 million recurring operations loss. Fiscal year-to-date income from recurring operations was $15 million, well above last year’s nearly $1.1 billion loss.
“We remain optimistic as the execution of Ascension’s strategic initiatives, including our economic improvement plan, continue to result in favorable quarterly financial results,” Liz Foshage, executive vice president and chief financial officer for Ascension, said in a release.
Similar to other systems, Ascension has seen substantial increases to its volumes and net patient service revenue that fueled total operating revenue growth of 6.2% for the quarter and 5.3% for the nine-month period.
In its release, the organization said its same-facility volume boost across nine months was “most notably driven by total inpatient admissions, emergency visits and total surgery visits as the system continues to expand capacity and backfill certain volumes that have shifted to the outpatient setting.”
“The positive trend in patient volume simply means we are sustaining and improving the health of more individuals in the communities we serve,” added Foshage. “Most importantly, as demonstrated by the recent CMS Hospital Star ratings, Ascension’s clinical quality scores continue to outperform national averages and further differentiate our hospitals’ quality."
The system’s management has also previously pointed to improved managed care negotiations with commercial payers as a factor in its net patient revenue gains.
Ascensions operating expenses, meanwhile, decreased by 2.4% year over year for the quarter and rose 0.6% across nine months. Though some of the reduction comes as a result of divestments, the system described the checked spending relative to its revenues as the product of its economic improvement plan.
“Through the dedication of our caregivers, leaders and associates, and their steadfast commitment to our Mission, we are hopeful for the future and confident that our organization will stay on this course,” Foshage said.
Ascension also reported net nonoperating gains of $760.6 million for the quarter and $811.2 million year to date, with both largely driven by investment returns. It had a $708.3 million gain and a $41.6 million loss during 2023’s comparable periods.
St. Louis-based Ascension runs 140 hospitals and 40 senior living facilities across the country. It employs about 132,000 people and reported more than $28 billion in revenue and billions in operating losses during the most recent fiscal year ended June 30, 2023.
Since the close of the quarter, the system has been grappling with a “ransomware incident” that triggered downtime procedures across numerous hospitals and disconnections from partners’ technology ecosystems. It is still investigating the incident.
In a recent note, Fitch Ratings said the Catholic system's "very strong liquidity and leverage position provides significant rating cushion" for "one-off events, such as the current cyberattack." Since September, the group has rated Ascension as AA+/Negative Outlook.