Amid pandemic, Ascension St. Vincent parent shows dramatic swing from red ink to black

Is the worst of the financial bleeding over for hospitals?

If what’s happening at the parent of Indianapolis-based Ascension St. Vincent is any guide, it just might be.

Catholic hospital giant Ascension Inc., based in St. Louis, said in a recent filing its net income reached $1.2 billion for the three months ending Sept. 30.

That’s a dramatic swing in fortune. Just three months ago, the 145-hospital system posted a loss of $1.04 billion for the full fiscal year ended June 30, then becoming the latest hospital system to gush red ink as a result of the COVID-19 pandemic.

And one year ago, in the comparable quarter, Ascension reported a net loss of $234.7 million—months before the pandemic even started.

Now, even under the stresses of dealing with another surge in COVID-19 cases and hospitalizations, Ascension is posting a large profit.

Despite the change from red to black, Ascension signaled that it is not yet out of the woods. The health system said in a recent filing that “consumer confidence and health care hesitation as a result of COVID-19 continue to affect Ascension markets, to varying degrees.”

It added that operations and volumes remain “below pre-pandemic levels” for the three months ended Sept. 30.

Ascension St. Vincent has more than two dozen hospitals in Indiana, including its flagship hospital on West 86^th St in Indianapolis. It also operates hundreds of physician clinics, urgent care centers and other facilities in Indiana. The parent company did not break out results for the Indiana locations.

Ascension said that across its 19-state network, hospital admissions fell 9.2% in the quarter. Emergency room visits were down 6.2%. Visits to physicians’ offices and clinics were down 3%.

Net patient service revenue was $6 billion in the quarter, a decline of 1.4 percent compared with the same period last year. Operating expenses edged up about 1%, to $6.5 billion. Ascension attributed the increase to a boost in salaries, wages and employee benefits, which was slightly offset by system efforts to manage expenses to volumes.

For the three months ended Sept. 30, Ascension recognized $184.9 million in federal relief funding.

Like many other providers, Ascension suspended all elective, nonessential medical and surgical procedures for several months to prepare for the surge of COVID-19 patients. Many of its patients stayed home as a result of shelter-in-place orders, “contributing to the system’s volume reductions, including emergency room and physician office visits unrelated to COVID-19,” Ascension said.

Ascension’s news—possibly signaling that the worst of the financial bleeding might be over—comes a month after several other Indianapolis-based hospital systems reported results.

Indiana University Health, the state’s largest hospital system, said in October that net income for the first nine months of the year fell 63%, to $329 million, as it dealt with temporary closures, supply disruptions and deferred medical procedures from the COVID-19 pandemic.

And Community Health Network also reported last month that income from operations dropped 48%, to $52.8 million, in the first nine months of the year due to the pandemic, compared to the same period in 2019.