St.-Louis-based Ascension reported a $79 million operating loss (-0.3% margin) for the 10 months ending April 30, a substantial improvement on the $1.2 billion operating loss in the previous 10-month period.
The results include $402 million in one-time, non-cash write-downs and non-recurring losses.
In May and June 2024, operations were hampered by the May ransomware attack, resulting in reduced revenues from the associated business interruption along with costs incurred to address the issues and other business-related expenses.
Despite this incident, Ascension drove a $1.2 billion operational improvement year over year for the 10 months ending April 30. The 136-hospital system's economic improvement plans focused on volume growth, rates and pricing, and cost levers.
The results are a notable improvement on the $3 billion operating loss (-5.5% margin) reported in fiscal year 2023. Including the cyberattack, Ascension reported a $1.8 billion (-4.9% margin) loss in FY 2024.
Ascension is also reorganizing its portfolio with several transactions in multiple markets.
"Our focus on data-driven decisions, financial discipline, and most importantly the needs of communities we serve has strengthened Ascension's foundation, and put us on a great path as we look to the future," President Eduardo Conrado said. "These accomplishments reinforce our mission and ensure we continue delivering exceptional care while deepening trust in our communities."
For the ten months ended April 30, Ascension reported a 5.2% year-over-year increase in total operating revenue. With the inclusion of May and June, FY24 operating revenue increased 0.7% while FY24 operating expenses grew by 0.4%.
The cyberattack also affected accounts receivable. Ascension's days cash on hand dropped from 211 days as of June 30, 2023 to 194 days by June 30, 2024. Net days in accounts receivable increased from 46.7 days to 78.4 days.
"Now that we are well on our way from recovering from May's cyber event, our focus is growing our patient volume and sustaining and improving the health of even more individuals in the communities we serve," CFO Saurabh Tripathi said. "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."
After factoring in nonoperating items, such as investment returns, Ascension reported a $1.1 billion net loss in FY 2024, representing a $1.6 billion turnaround from the prior year. Ascension's long-term debt stands at $6.76 billion.
"While temporarily impacted by the cybersecurity incident, Ascension's balance sheet and liquidity levels remain strong with sufficient liquidity to continue to provide care for patients," Mr. Tripathi said. Ascension's solid financial foundation of a strong balance sheet with approximately $41 billion of assets and over $15 billion of liquidity was built to weather a storm like this. With the strong momentum of operational improvements, I am confident Ascension's best days are ahead of us."