The parent of Ascension St. Vincent Indiana posted a fiscal year-end net loss of $1.04 billion, becoming the latest hospital system to bleed red ink as a result of the COVID-19 pandemic.
Catholic hospital giant Ascension Inc., based in St. Louis, also said it did some restructuring and layoffs during the year, but did not pinpoint where that took place. Officials at Ascension St. Vincent Indiana did not immediately provide information to IBJ about any local layoffs or restructuring.
Ascension recently released results for the 12 months ending June 30, and blamed much of the downturn on the pandemic. The system reported an operating loss off $639 million for the year, compared to $130 million operating gain last fiscal year.
“The unprecedented international outbreak of the novel coronavirus has had numerous economic and operational impacts on the U.S. economy and global financial markets, as well as affecting Ascension employees, patients, communities and business operations,” Ascension said in a written statement. “COVID-19 has been encountered across all Ascension markets, to varying degrees, and has had a negative impact on the system’s revenues and operating margin.”
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
The company recorded $174.1 million of restructuring, net-impairment and one-time losses, some attributable to layoffs. “Losses are primarily due to one-time termination and restructuring expenses and impairment of certain long-lived assets,” the company said in a statement.
As of June 30, Ascension employed more than 150,000 people at more than 2,600 sites of care, including 150 hospitals and more than 50 senior living facilities in 20 states and the District of Columbia. In central Indiana, Ascension St. Vincent employs more than 13,000 people, making it one of the region’s largest employers.
Operating revenue from patient service for the year was $22.8 billion, down 4%.
Patient admissions fell 6%, to 763,831. Emergency room visits fell 10%, to 3,007,177. Inpatient and outpatient surgeries fell 9%, to 582,133.
“Volumes were trending favorably prior to the outbreak, as equivalent discharges increased 1.4% through the eight months ended Feb. 29, 2020, as compared to the same period in the prior year,” the company said.
At the same time, expenses were climbing to handle the influx of COVID-19 patients and provide protective gear for doctors, nurses and technicians. Total operating expense increased about 3%, to $673 million. Salaries, wages and benefits increased $305.2 million, or 2.5%, for the year.
“The increases year-over-year were expected and primarily due to moderate merit and cost of living adjustments and onboarding of additional physicians and mid-level providers for service-line expansion,” Ascension said.
To help mitigate financial damage caused by the pandemic, Ascension received $175 million in federal relief aid and another $211 million in federal grants.