- Ascension, one of the largest nonprofit hospital chains in the U.S., reported it faced "unprecedented" operating pressure amid another COVID-19 surge in the back half of the year. As a result, the St. Louis-based system's net income fell significantly to $949.5 million for the three months ended Dec. 31, Ascension's second quarter, compared to its profit of $2.6 billion same time last year.
- For the first six months of its fiscal year, expenses swelled 7%, outpacing revenue growth of just 2%. Federal relief funds helped offset those operating challenges in the first six months but the total relief recognized was much less than the prior-year period.
- As a result, Ascension's operating margin in the first six months fell to 0.2% from 5.7% the year prior, according to recently released financial statements.
Hospital operators across the country faced significant operating challenges late last year as COVID-19 hospitalizations climbed once again, straining resources and staff.
Many hospitals experienced increased expenses, particularly for labor, as operators responded to the latest surge of COVID-19 patients. As hospitals were short on staff, rates for traveling nurses skyrocketed, attracting the attention of Congressional lawmakers who have urged the White House to investigate.
During the back half of last year, Ascension also had to increasingly rely on contract labor to combat shortages during a surge of patients. As a result, the St. Louis-based health system reported that salaries, wages and benefits increased 9% for the six months ended Dec. 31, compared with the prior-year period.
Surges of the novel coronavirus in various markets led to high levels of COVID-19 patients admitted to the hospital, which in turn disrupted non-emergency care "in almost all markets throughout the period," Ascension, which operates 142 hospitals in 19 states and Washington, D.C., reported.
Hospitals tend to see patients defer elective care when cases and COVID-19 hospitalizations spike. It's become a reliable trend throughout the pandemic, now in its third year. That trend puts additional financial pressure on operators who rely on lucrative elective procedures.
Ascension reported volumes increased during the six-month period, but still trail pre-pandemic levels.
Although Ascension reported its net income fell in both the quarter and first six months of its fiscal year, high investment income boosted the health system's bottom line.