The health system is "built to weather a storm like this," executive vice president and CFO Saurabh Tripathi said.
Ascension's earnings over the past year are a prime example of the turmoil a cyberattack can inflict on a bottom line.
The St. Louis-based hospital operator was on its way to a significant financial recovery before suffering a ransomware attack in May that derailed operations and led to a $1.1 billion net loss for fiscal year 2024.
The cyberattacks on Ascension, Change Healthcare, and other organizations of late have underscored the importance of healthcare leaders investing in cybersecurity to protect against disruptions and lost revenue.
In the case of Ascension, the health system reported a loss from recurring operations of $79 million across the first 10 months of the fiscal year, a marked improvement from the $1.2 billion loss tallied in the same period for the prior year.
However, the ransomware attack caused a considerable downturn over the final two months of the fiscal year, forcing Ascension to finish with an operating loss of $1.8 billion.
"This incident resulted in delays in revenue cycle processes, including insurance verification processes, claims submission, and payment processing, as well as the incurrence of certain remediation costs, which collectively led to negative impacts to results of operations and cash flows during May and June 2024," Ascension wrote in its earnings report.
The system experienced encouraging growth in patient volume across the first 10 months, when emergency room visits were up 2.5%, inpatient surgery visits were up 2%, outpatient surgery visits were up 0.5%, and encounters per provider were up 3.9%. In May and June, same facility patient volumes dipped between 8% to 12% on average from the same period the prior year.
Even after feeling the financial ramifications of the cyberattack, the system's operating margin improved by $1.2 billion from the $3 billion operating loss in fiscal year 2023. Net loss, meanwhile, shrunk from $2.7 billion for 2023 to $1.1 billion, including operating and nonoperating items.
Ascension executive vice president and CFO Saurabh Tripathi said that the operator's focus is on growing patient volume now that it is recovering from May's incident.
"While temporarily impacted by the cybersecurity incident, Ascension's balance sheet and liquidity levels remain strong with sufficient liquidity to continue to provide care for patients," Tripathi said in a statement. "Ascension's solid financial foundation of a strong balance sheet with approximately $41 billion of assets and over $15 billion of liquidity was built to weather a storm like this. With the strong momentum of operational improvements, I am confident Ascension's best days are ahead of us."
The Catholic nonprofit has also been busy divesting assets to trim down its portfolio, shed expenses, and strengthen its core markets.
This year has included deals by Ascension to sell nine Illinois hospitals to Prime Healthcare and a five-hospital system to UAB Health.
Jay Asser is the CEO editor for HealthLeaders.
KEY TAKEAWAYS
The ransomware attack on Ascension in May curtailed the nonprofit’s earnings for fiscal year 2024 after the system performed encouragingly in the first 10 months.
Ascension reported a loss from recurring operations of $79 million through April, a drastic improvement from the $1.2 billion loss in the same period the previous year.
Despite the final two months of the fiscal year causing Ascension to post a net loss of $1.1 billion, it was still a major step up from the $3 billion net loss for fiscal year 2023.