Dive Brief:
- St. Louis-based Ascension Healthcare brought in $231 million in operating income during its second quarter 2024 ended Dec. 31, compared to an operating loss of $291 million during the prior-year period.
- Ascension attributed its operational improvement in part to volume growth. Inpatient admissions increased 0.5% in the six months ended Dec. 31, with same-facility admissions increasing 1.2% for the same period year over year.
- The health system said it slowed the pace of expense growth during the quarter. Total salaries, wages and benefits decreased $152 million in the six months ended Dec. 31, totaling $54.9 million for the quarter, as Ascension outsourced lab services and continued retention programs to reduce dependence on pricey staffing agencies.
Dive Insight:
Nonprofit hospital operator Ascension finished its 2023 fiscal year ended June 30 with a net loss of $2.7 billion and an operating loss of $3 billion. It received a negative credit outlook from two credit agencies, S&P Global Ratings and Fitch Ratings, in October.
At the time, the credit agencies were unsure Ascension would be able to navigate continued supply and staffing shortages with healthy operating margins. S&P Global didn’t predict a return to profitability for the provider until fiscal year 2025.
In management’s discussion of the quarterly results published on Friday, Ascension said it still struggled with expenses. However, the system said it had made progress reducing the pace of expense growth.
Ascension is shifting focus toward ambulatory care and telehealth, and is divesting some hospitals in its portfolio, according to the system. This month, Ascension announced it would to sell its Pittsburgh-based Via Christi hospital to Mercy for an undisclosed figure and sell New York-based Our Lady of Lourdes Memorial Hospital to the Guthrie Clinic.
Ascension reduced labor spend and cut salaries and benefit spending. Benefit spending dropped $93 million year over year during the six months ended Dec. 31. However, Ascension’s average wage rate increased slightly, especially for clinical roles, according to the system.
The nonprofit also paid 3.5% more for supplies in the six months ended Dec. 31, as pharmaceutical and medical supply costs rose.
