The nonprofit health system bounced back in a major way from the previous quarter to start the fiscal year on a positive note.
After seeing its finances plummet due to a significant cyberattack suffered in May, Ascension has started to turn around its bottom line.
The hospital operator kicked off fiscal year 2025 with a $197 million loss from recurring operations, marking a $1.2 billion improvement from the last quarter as recovery from the cyberattack continued and patient volume steadily grew.
Ascension's first 10 months of fiscal year 2024 showed promise, but the ransomware attack wreaked havoc on the final quarter, resulting in a $1.4 billion recurring operating loss in Q4.
One of the most notable effects of the attack was on same facility patient volume, which dropped between 8% to 12% on average year over year in May and June.
In Q1 FY2025, same facility volumes returned to within 1.5% of the volumes from the previous year, while same facility net patient service revenue increased 2.4% alongside same facility operating expenses jumping 2.6%.
The St. Louis-based system "continues to expand capacity and backfill certain volumes that have shifted to the outpatient setting as well as improve access, including any areas impacted by the cybersecurity attack," Ascension stated in its release.
"This quarter's financial results mark a pivotal step forward, illustrating the effectiveness of our focused economic improvement strategies," Saurabh Tripathi, Ascension executive vice president and CFO, said in a statement. "An uplift in recurring operating performance reflects our commitment to disciplined financial management, carefully balanced between growth and efficiency. Despite ongoing challenges, including the continuing recovery from May's cybersecurity attack, we are solidifying our operational foundation to support stability and future investments."
Ascension's net income for Q1 was $387 million, compared to a net loss of $597.6 million over the same period last year.
In addition to several divestitures the system has recently made, Ascension also entered a joint venture with Henry Ford Health System. The partnership, which launched on October 1, allows Ascension to extend its footprint in Michigan.
Jay Asser is the CEO editor for HealthLeaders.
KEY TAKEAWAYS
Ascension posted a recurring operating loss of $197 million in the first quarter of fiscal year 2025, putting the recurring operating loss of $1.4 billion from Q4 FY2024 in the rearview mirror.
The St. Louis-based health system is recovering from the devastating financial impact caused by May's ransomware attack, which in part affected same facility patient volume.
In Q1, however, Ascension's same facility volumes were back to familiar levels, contributing to a $1 billion reversal in net income.