Ascension posted gains in operating income and net income in its fiscal first half, despite a $198 million, or 23%, increase in uncompensated care for people living in poverty, the company reported Wednesday.
Ascension, the nation's largest not-for-profit hospital company, reported income from operations of $380 million on revenue of $11.4 billion in the first half ended Dec. 31. That compares with operating income of $311 million in the year-earlier period on revenue of $10.7 billion.
To get the results, Ascension fought through a headwind of higher uncompensated care. For the first half, those costs jumped to $1.1 billion from $864 million in the prior year period.
Last spring, Ascension decided it would waive the deductibles or unpaid bills for any patient earning below 250% of the federal poverty level at any of its 141 hospitals and other facilities across 24 states.
That mission-based policy contributed to the increase in the first half as did a tough prior-year comparison when Ascension received one-time supplemental payments from Medicaid expansion programs that did not recur this year.
In the first half, Ascension experienced increases in patient volumes across its hospitals and service lines.
“We saw an increase in volume and net patient service revenue, driven by increased inpatient admissions, inpatient surgeries, observation days and emergency room visits,” said Nick Ragone, Ascension's chief marketing and communications officer.
Salaries and employee benefits increased $49.6 million, or 1%, as compared with the same period in the prior year, primarily due to wage increases and an increase in employee health insurance expense on rising pharmacy costs, the company said.
Ascension's $33 billion investment portfolio yielded a $449 million gain in the first half, or a 3.8% rate of return.