Ascension's operating income dips 78% in first half of FY 2018

St. Louis-based Ascension saw revenues and operating income decline in the first six months of fiscal year 2018.

Ascension reported revenues of $11.3 billion in the first half of fiscal year 2018, down slightly from revenues of $11.4 billion in the same period of the year prior. The decline in revenues was largely attributable to the sale of Saint Joseph's Hospital in Marshfield, Wis., at the end of June 2017 and the divestiture of Door County Hospital in Sturgeon Bay, Wis., in October 2016.

Ascension said a drop in inpatient volumes was partially attributable to the hospital divestitures. On a same-facility basis, equivalent discharges, inpatient admissions, observation days and emergency room visits decreased year over year. However, outpatient volumes increased year over year on a same-facility basis.

The health system kept expenses in check in the first half of fiscal year 2018. Ascension said expenses climbed 1.5 percent year over year. The health system's uncompensated care, which includes the cost of providing care to low-income patients and other community benefit programs, increased 6.1 percent year over year.

Ascension saw net impairment, restructuring and one-time losses increase from $56.1 million in the first half of fiscal 2017 to $78.3 million in the same period of fiscal 2018. The losses were primarily due to $13.3 million in expenses associated with the implementation of an enterprise resource planning system; one-time termination and other restructuring expenses of $28.9 million; and other nonrecurring expenses, such as software implementations, of $36.1 million.

Ascension ended the first half of fiscal 2018 with operating income of $84.7 million, down 78 percent from operating income of $379.6 million in the same period of the year prior.

After factoring in strong investment returns, Ascension posted net income of $882.2 million in the six months ended Dec. 31, up 24 percent from the same period of the year prior.

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