Ascension fiscal 2020 operating loss hits $639M amid pandemic

ASCENSION’S BOTTOM LINE sustained a heavy blow from suspended elective procedures in anticipation of COVID-19 patients in fiscal 2020, and more than $1 billion in federal grants didn’t keep the health system in the black.

The 150-hospital Catholic health system rounded out the year ended June 30 with a $639.4 million operating loss, a -2.5% margin. Add to that Ascension’s sizable investment loss, and its net loss hit $1 billion in its fiscal 2020, compared with net income of $1.2 billion in fiscal 2019.

“COVID-19 has been encountered across all Ascension markets, to varying degrees, and has had a negative impact on the system’s revenues and operating margin,” Ascension said in a statement accompanying its disclosure.

St. Louis-based Ascension received $1.1 billion in relief grants under the CARES Act, $883 million of which was recognized during the year. That money does not have to be repaid.

The health system also took in about $2 billion in advanced Medicare payments from CMS, which boosted its liquidity. Ascension ended the year with 284 days cash on hand, up from 271 the prior year.

Ascension’s revenue was effectively flat year-over-year at $25.3 billion. At the same time, expenses crept up 2.7% to $25.7 billion. The system’s fiscal 2020 operating loss represented a substantial swing from its $130.6 million operating gain in fiscal 2019.

The system said its higher expenses were due to merit pay and cost-ofliving adjustments and onboarding more physicians and midlevel providers for service line expansions.

While Ascension’s volumes suffered greatly during the pandemic, they recovered rapidly in the fourth quarter of fiscal 2020, with discharges in June 2020 at

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90% of their June 2019 levels.