St. Louis-based Ascension has reported an operating loss of $82.6 million in the quarter ending March 31, representing about a $1.3 billion improvement on the $1.4 billion operating loss posted in the same quarter last year, according to financial documents published May 17.
Despite the loss in the fiscal third quarter, the health system said it has realized "meaningful operational improvement from economic improvement plans focused on volume growth, rates and pricing, and cost levers."
Revenue increased 6.2% year over year to $7.37 billion while expenses decreased 2.4% to $7.44 billion. Nonrecurring losses of $25.5 million dragged the health system's quarterly performance down slightly.
For the nine months ending March 31, 2024, Ascension reported an operating loss of $237.8 million, a substantial improvement on the $1.8 billion loss reported in the prior-year period. Ascension also reported recurring operating EBIDA of $1 billion or a 4.7% recurring operating EBIDA margin for the nine months ended March 31.
"We remain optimistic as the execution of Ascension's strategic initiatives, including our economic improvement plan, continue to result in favorable quarterly financial results," CFO Liz Foshage said. "The positive trend in patient volume simply means we are sustaining and improving the health of more individuals in the communities we serve. 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."
For the nine months ending March 31, Ascension saw an increase in overall same facility volume over the comparable period in the prior year, 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.
Ascension's net income for the three months ended March 31 was $581 million, representing a $1.3 billion turnaround from the same period in the prior year. For the nine months ended March 31, Ascension's net income improved $2.2 billion over the prior year.
"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," Ms. Foshage said.
Ascension's bonds are rated at "AA" by Fitch Ratings and its debt levels are favorable compared to other large health systems. The ratings agency, which revised Ascension's outlook to negative in September amid operational and challenges and labor availability issues, said that the health system's financial turnaround should not be impeded to any great degree by the ransomware attack it has suffered.
The 140-hospital system's strong liquidity and leverage position provides a substantial rating cushion for what Fitch assumes to be one-off events — such as the current cyberattack — with a generally limited operational disruption and related financial losses.
Ascension's year to date 2024 results show that its operations continue to improve.