Ascension’s outpatient transformation comes at a cost
ASCENSION’S REINVENTION as a system centered around value and outpatient care is having anticipated but not exactly welcome effects on its operating results.
Roughly eight months after announcing its pivot from focusing on hospitals and inpatient care, the St. Louis-based not-forprofit saw same-facility declines in equivalent discharges, inpatient admissions and other key areas during the first quarter of its fiscal 2019, ended Sept. 30. It’s also seeing higher proportions of patients covered under government payers and expenses from uncompensated care.
“As this transition, and Ascension’s investment in population health management and addressing the social determinants of health continues, changes to operating performance are expected,” Ascension wrote in a narrative section explaining its results.
Ascension’s recurring operating margin was 0.9% in the first quarter, compared with 1.1% during the same period in fiscal 2018. The health system drew $36.4 million in income from operations during the quarter, compared with $11.5 million in the prior-year period.
Inpatient surgeries declined 4.1% on a same-facility basis during the quarter, and emergency room visits fell 4%. Ascension’s inpatient admissions fell 3.8% on a same-facility basis, and equivalent discharges fell 0.3%. Same-facility outpatient volumes increased 0.5% in the same time period, and outpatient surgeries rose 1.4%. Ascension said its uncompensated care and community benefit spending grew 1.3% year-over-year to $531 million during the first quarter of fiscal 2018.
The health system drew $6.16 billion in operating revenue during the first quarter, up nearly 11% from $5.55 billion during the first quarter of fiscal 2018. Within that, net patient service revenue increased 10.1% to $5.73 billion.
Expenses rose 11.1% to $6.11 billion during the quarter. The majority of the increase was due to Ascension’s acquisition of Presence Health. On a same-facility basis, total operating expenses increased $33.4 million, or 0.6%.The health system reported $459 million in net income during the first quarter of 2019, up 11% compared with $413 million in the prior-year period.