Ascension's operating income drops 62% in first 9 months of fiscal year

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

Ascension reported revenues of $17.08 billion in the first nine months of fiscal 2018, down slightly from revenues of $17.15 billion in the same period a year earlier. 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 in recently released financial documents. On a same-facility basis, operating revenue increased by $37.2 million year over year.

Ascension said a drop in inpatient volumes in the first nine months of the current fiscal year was partially attributable to the hospital divestitures. Inpatient admissions, observation days and emergency room visits decreased 3.1 percent, 1.4 percent and 2.3 percent, respectively, year over year in the first nine months of fiscal year 2018. However, outpatient volumes grew year over year primarily due to a 3.8 percent increase in physician office and clinic visits.

The health system kept expenses in check in the first nine months of fiscal 2018. Ascension said expenses climbed 2.4 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 14.9 percent year over year.

Ascension saw net impairment, restructuring and one-time losses increase from $107.6 million during the nine months ended March 31, 2017, to $124.6 million in the same period of fiscal year 2018. The losses in the first nine months of the current fiscal year were primarily due to $12.6 million in expenses associated with the implementation of an enterprise resource planning system; one-time termination and other restructuring expenses of $57.2 million; and other nonrecurring expenses, such as software implementations, of $54.8 million.

Ascension ended the first nine months of fiscal year 2018 with operating income of $281.8 million, down 62.4 percent from operating income of $749.3 million in the same period of the year prior.

After factoring in strong investment returns, Ascension posted net income of $1.7 billion in the nine months ended March 31, up from $1.5 billion in the same period a year earlier.

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