Ascension has released financial results for the nine months ended March 31, 2023 (Q3 FY23 YTD). The results demonstrate Ascension’s operations and volumes are stabilizing from the volatility and operational disruptions of the prolonged COVID-19 pandemic. These disruptions, however, amidst broader inflationary and recessionary pressures within the U.S. economy, have contributed to higher operating costs coupled with sustained revenue challenges.
For the nine months ended March 31, 2023, Ascension reported a Loss from Recurring Operations of $1.08 billion or a -5.1% margin. When normalized to exclude certain one-time items, Ascension’s Loss from Operations for Q3 FY23 YTD was $883 million or a -4.2% margin, as compared to a Loss from Recurring Operations of $959 million or a -4.7% margin for the same period in the prior year.
“As has been widely reported, hospitals nationwide are experiencing intense financial and operational pressures as a result of the after effects of the COVID-19 pandemic, continued healthcare worker staffing shortages, ongoing supply chain challenges and persistent inflation. Ascension is no exception to these trends,” Liz Foshage, Executive Vice President and Chief Financial Officer, Ascension, said.
“Since our founding in 1999, Ascension has responded to community needs and made strategic changes, always guided by our Mission. As we are adapting to this new normal, we are listening to our teams of caregivers and associates about what they need to succeed and best serve those in our care. We are also listening to our patients and those in our communities about how we can best meet their changing healthcare needs.”
For Q3 FY23 YTD, Ascension experienced an increase in overall volume over the prior year, most notably driven by outpatient volumes including outpatient surgeries, emergency room visits and physician office & clinic visits. For the three-months ended March 31, 2023 (Q3 FY23), Ascension reported even greater volume growth compared to the same three month period in the prior fiscal year, which contributed to net patient service revenue growth of 3.2%.
Ascension has implemented significant improvement plans focused on operational efficiencies and controlling expense growth although these actions have not yet fully offset the inflationary pressures impacting the broader healthcare provider industry. Additionally, reimbursement rates from commercial and governmental payers have not kept pace with operating expense inflation. Due to these ongoing business conditions impacting healthcare providers, Ascension also recognized one-time, non-cash impairment losses in Q3 of FY23 of $715 million as the carrying value of certain assets within Ascension’s Markets may not be fully recoverable. Including the impact of the asset impairments, Ascension’s reported Loss from Operations was $1.77 billion or a -8.3% margin for the nine months ended March 31, 2023.
