Ascension has released financial results for the year ended June 30, 2023 (FY23). For the year ended June 30, 2023, Ascension reported a net loss of $2.66 billion. The results demonstrate Ascension’s operations and volumes have been impacted by and are stabilizing from the volatility and operational disruptions of the prolonged pandemic amidst broader inflationary and recessionary pressures within the U.S. economy. These disruptions have contributed to higher operating costs coupled with revenue challenges, especially in the first half of the fiscal year.
For the year ended June 30, 2023, Ascension reported a Loss from Recurring Operations of $1.60 billion or a -5.6% margin. When normalized to exclude certain one-time items, Ascension’s Loss from Operations for FY23 was $1.39 billion or a -4.9% margin, as compared to a Loss from Recurring Operations of $1.17 billion or a -4.2% margin for the prior year.
“The American healthcare system is experiencing unprecedented operational and financial challenges, and Ascension is no exception to these larger trends,” said Liz Foshage, Executive Vice President and Chief Financial Officer, Ascension. “The after effects of the COVID-19 pandemic, continued healthcare worker staffing shortages, ongoing supply chain challenges and persistent inflation were headwinds we faced throughout the last fiscal year.”
For FY23, Ascension experienced an increase in overall volume over the prior year, most notably driven by total surgical visits along with emergency room visits and physician office and clinic visits. For the three months ended June 30, 2023 (Q4 FY23), Ascension also reported volume growth compared to the same three month period in the prior fiscal year, which contributed to net patient service revenue growth of 4.2%.
Ascension has implemented significant improvement plans focused on operational efficiencies and containing 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 FY23 of $1.50 billion as the carrying value of certain assets within Ascension’s markets may not be fully recoverable.
“Despite this challenging operating environment, Ascension remains committed to our Mission and responding to the needs of the communities we serve,” Foshage added. “As we look forward to the next fiscal year many of these headwinds remain, but our team is prepared to adapt to this new normal and chart a path back to operational stability.”