Livonia, Mich.-based Trinity Health recorded an operating income of $77.4 million (1.2% operating margin) in the first quarter of fiscal 2026, up from an operating income of $36.7 million (0.6% margin) during the same period last year, according to its Nov. 19 financial report.
Trinity said it saw improvements in payment rates, patient care volumes, payer mix and other revenue, offset by unfavorable service mix driven by lower surgical volume.
Total operating revenue was $6.6 billion for the three months ended Sept. 30, up from $6.2 billion last year. Net patient service revenue grew 3.7% year over year, primarily due to improvements in payment rates and patient care volumes.
Operating expenses were $6.5 billion for the quarter, up from $6.2 billion last year. Salaries, wages and benefits increased 3.2% year over year, with a 0.5% increase in full-time employees and a 3.5% increase in salary rates. Contract labor rose 14.3% — with contract labor full-time employees increasing 3.7% — as the system “continues to implement repositioning actions to address industry wide staffing shortages and wage inflation.” Supply costs increased 8.6% driven by rate increases related to retail pharmacy, drugs, implants, surgical supplies, and increased volumes.
Trinity said in the report that it is working to identify “repositioning actions” in the new fiscal year to mitigate the effect of ongoing negative industry trends and evolving legislative pressure on operations. Those actions include redesigning and repositioning clinical service lines, ministry portfolios and administrative services using a zero-based methodology. The system also plans to optimize existing service lines and invest in prioritized clinical programs and services such as ASCs, imaging, robotics, and the non-acute community division with an emphasis on primary care.
The system also plans to improve supply chain efficiency and workforce productivity by using technology to mitigate the rising cost of inflation and supply chain volatility. Trinity is also working to improve its commercial payer mix by prioritizing medical group access and growing outpatient services and elective surgical care.
Trinity reported a net income of $697.1 million, up from $586.9 million during the same period last year.
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