Earnings release season in full swing

With the start of every new year comes a flurry of hospital systems and insurance companies releasing earnings reports— whether they be annual, quarterly or both—and this week is no exception.

Catholic-sponsored Ascension has been making waves in recent months, first with reports that it is considering a merger with Providence St. Joseph Health and then with the surprising news that it plans to create a genericdrug company with three other not-for-profit health systems. On Tuesday, the St. Louis-based system is expected to release its second-quarter 2018 financial results.

Ascension’s operating margin through November 2017 was 1.6%, down from 3.7% in the year-ago period, and Tuesday’s report will reveal whether the system has been able to turn that trend around. The system’s operating EBITDA was $696 million at that time, down from $892 million a year earlier.

Ascension Chief Financial Officer Anthony Speranzo told Modern Healthcare at the J.P. Morgan Healthcare Conference last month that soft volumes are to blame. The system is compensating by finding nonclinical savings, such as eliminating redundant work and consolidating services.

Dallas-based Baylor Scott & White Health is scheduled to release its financials for the six months ended Dec. 31, 2017, in a quarterly bond disclosure the day after Ascension’s release. The health system’s release should show whether it has managed to stay on its path of growing revenue over expenses. In its fiscal year ended June 30, 2017, the system saw $630 million in excess revenue over expenses, up significantly from $253 million in the previous year.

Molina Healthcare plans to release its fourth-quarter 2017 and year-end financials after the market closes Monday, followed by a conference call on Tuesday.

Molina’s new CEO, Joseph Zubretsky, is a former Aetna executive whose predecessor was fired over the company’s poor financial performance. The company is undertaking an overhaul that has included layoffs and selling off primary-care clinics. Zubretsky told Modern Healthcare at the J.P. Morgan conference that the company grew too fast. He said he’ll focus on reinvesting in infrastructure to manage the company’s current revenue. Once it reaches a target margin, he’ll look to grow again.