Franciscan Missionaries of Our Lady Health System, a 10-hospital system headquartered in Baton Rouge, La., reported $188 million in operating income (4.9% margin) in the fiscal year ending June 30, a $241 million improvement on the $53 million loss (-1.5% margin) in the previous fiscal year.
"The financial performance improvement was achieved with an ideal combination of expense control and revenue growth," Mike Gleason, executive vice president and CFO, told Becker's.
Revenue increased 11.7% year over year to $3.82 billion while expenses grew by 4.7% to $3.64 billion. Overall labor costs increased 3.9% year over year to $1.71 billion.
Like most health systems, FMOLHS was faced with significant financial headwinds coming out of the pandemic.
"Given the gravity of the situation, FMOLHS accelerated its journey from a holding to an operating company during FY 2023, which enabled us to achieve systemwide improvements more rapidly in clinical documentation, throughput, and most significantly, an almost total elimination of contract labor within our nursing units while simultaneously reducing our turnover rates to historical lows in fiscal year 2024," Mr. Gleason said. "Concurrently, we focused on market share capture in tandem with our cost reduction initiatives, leading to a 11.7% increase in operating revenue in FY 2024."
After accounting for nonoperating items, such as investment returns, FMOLHS reported a net income of $425.3 million in FY 2024, improving on the $163.7 million net income in FY 2023.
"Although we have had opportunities to grow FMOLHS through acquisitions, currently we have elected to focus on being true to our mission and ministry in the communities we serve," Mr. Gleason said. "We believe this focus will allow us to be better positioned to navigate the challenges that lie ahead and continue to invest in our most valuable asset — our incredibly talented and dedicated team members."