Ascension is the latest healthcare organization to report financial woes in a post-pandemic environment with rising expenses and no signs of relief.
The St. Louis-based not-for-profit health system posted a $1.84 billion net loss in its latest fiscal year, which ended June 30, according to an audit report released last week. That compared with net income of $5.67 billion in fiscal year 2021.
Total revenue rose in the year by 2.7%, to $27.98 billion.
Expenses increased to $28.77 billion, compared with $26.69 billion in the prior year. Ascension reported a 11.2% jump in expenses for salaries and wages, a 2.7% increase for supplies including COVID-19 and oncology treatments and a 10.3% increase for purchased services, such as dietary and outsourced IT services.
Ascension’s operating margin fell to -3.1%, compared with a 2.5% margin a year earlier.
Last month, credit rating agency Fitch Ratings lowered its outlook for nonprofit hospitals and health systems to “deteriorating,” driven by high labor costs, inflation and investment losses. Analysts are waiting to see if health systems will default on debt covenants.
A wave of nonprofit health systems released results in August for the first six months of 2022. Ohio-based Cleveland Clinic posted a $1.07 billion net loss. Advocate Aurora Health, with dual headquarters in Milwaukee and Downers Grove, Illinois, reported first-half losses exceeding $600 million. Providence, based in Washington, posted a first-half loss nearing $2 billion.