St. Louis-based Ascension saw operating income decline in fiscal year 2017, but the system ended the period with higher net income than the year prior due to strong investment gains.
Ascension reported revenues of $22.6 billion in fiscal year 2017, which ended June 30, up 3.4 percent from revenues of $21.9 billion in fiscal year 2016. The revenue boost was attributable, in part, to an increase in patient volume.
Ascension said inpatient admissions, outpatient visits, surgeries, observation days and emergency room visits were up year over year in fiscal year 2017. The patient volume growth was primarily attributable to Ascension's acquisition of Glendale, Wis.-based Wheaton Franciscan Healthcare's Southeast Wisconsin operations in March 2016.
Although Ascension reported revenue growth, the system's rising expenses offset those gains. Ascension's total operating expenses were 4.7 percent higher in fiscal year 2017 than in the year prior. This growth was fueled by higher labor, employee benefits and supplies costs. The system's uncompensated care also increased, climbing 9.2 percent year over year to $1.84 billion.
Ascension ended fiscal year 2017 with operating income of $552.7 million, down from operating income of $753.2 million in fiscal year 2016.
After factoring in strong investment returns, Ascension saw net income increase year over year. The system reported a $1.4 billion investment gain in fiscal year 2017, compared to a $358.3 million investment loss in the year prior.
Ascension reported net income of $1.86 billion in fiscal year 2017, more than three times the net income of $477.7 million the system recorded in fiscal year 2016.
"Ascension had a strong and impactful fiscal year 2017 for our organization and for our patients, driven by the organization's focus on providing compassionate, personalized care for all persons where, how and when they need it," said Nick Ragone, chief marketing and communications officer of Ascension.
"Ascension is an incredibly well run and business savvy organization," says Scott Becker, publisher of Becker's Healthcare. "It has tremendous leadership in Tony Tersigni and their entire team."
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