Becker's Hospital Review

January 2021 Issue of Becker's Hospital Review

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Page 12 of 47

13 CFO / FINANCE Providence records $214M operating loss through Q3 By Alia Paavola D espite receiving $682 million in federal aid, Renton, Wash.-based Providence recorded an operat- ing loss in the first nine months of 2020, according to financial documents pub- lished in November. In the nine-month period ended Sept. 30, 2020, the 51-hospital network post- ed a $214 million operating loss. In the same period in 2019, Providence saw an operating income of $198 million. e health system saw its revenue reach $18.9 billion in the nine months ended Sept. 30. is compares to $18.7 billion recorded in the same period one year prior. However, Providence saw its net patient revenue decline by about $1 bil- lion year-over-year, to $13.9 billion. Providence's overall revenue was higher in the first nine-months of 2020 com- pared to 2019 due to grants from the federal Coronavirus, Aid, Relief and Economic Security Act, the health sys- tem said. e health system saw its expenses climb 4 percent year over year to $19.1 billion. e expense increase was driven by labor and pharmaceutical costs, as well as an increase in the cost and amount of staff protective gear, Providence said. Providence ended the nine-month peri- od ending Sept. 30, 2020, with a net in- come of $49 million. e health system attributed the income to a nonoperating gain of $263 million. In the first nine months of 2019, Providence recorded a net income of $970 million. "As I look back on the first nine months of the year, I am incredibly proud of how the caregivers of Providence have stepped up to meet the challenges in front of us. We have many more months of COVID-19 ahead, and we are com- mitted to continue navigating the pan- demic and ensuring the health and safe- ty of our caregivers and those we serve," Providence President and CEO Rod Hochman, MD, stated. n Tower Health considers selling 6 hospitals as part of financial turnaround plan By Alia Paavola A s part of a financial turnaround plan, Tower Health will consider selling all six of its Philadelphia-area hospitals, according to a November report from The Philadelphia Inquirer. The West Reading, Pa.-based health system has faced a growing debt load and significant financial losses in fiscal year 2019 and fiscal 2020. In the fiscal year ended June 30, Tower Health recorded an operating loss of $442 million. It also saw an operating deficit of $178.8 million the year prior. Since 2017, Tower Health has purchased six Philadelphia-area hospitals. Five of them were from Franklin, Tenn.-based Community Health Systems. The other, St. Christopher's Hospital for Children, was bought in partnership with Drexel University in Philadelphia. In a conference call with investors Nov. 10, Tower Health officials said they were evaluating all options to improve the organization's balance sheet and compet- itive position. "We as a board will consider any and all strategic options" with "a very strong preference, if not an obsession, to preserve the mothership, Reading Hospital," Tower Health Chair Tom Work told investors, according to the Inquirer. The conference call with investors came about two weeks after S&P Global Rat- ings lowered Tower Health's long-term rating three notches because of its dete- riorating finances in fiscal year 2020. n Ascension's net income hits $1B in Q1 By Alia Paavola S t. Louis-based Ascension saw its net income reach $1.2 billion in the first quarter of fiscal 2021, which ended Sept. 30, according to financial documents released in No- vember. In the same quarter in fiscal 2020, the health system recorded a net loss of $234.7 million. The 145-hospital system reported op- erating revenue of $6.6 billion in the first quarter of fiscal 2021, up 2.5 per- cent from the same period a year ear- lier. Net patient service revenue was $6 billion in the first quarter, a decline of 1.4 percent compared to the same period of fiscal 2020. Operating expenses remained largely flat year over year, increasing just 0.8 percent to $6.5 billion. Ascension said the slight increase was due to a boost in salaries, wages and employee ben- efits, but it was offset by system efforts to manage expenses to volumes. Ascension recorded an operating income of $143.5 million in the first quarter of fiscal 2021. This compares to an operating loss of $23.1 million in the same period a year earlier. Nonoperating income in the first quar- ter of fiscal 2021 reached $1.2 billion, compared to a nonoperating loss of $186 million in the first quarter of fis- cal 2020. Ascension said it recorded net impair- ment, restructuring and nonrecurring losses of $9.2 million, primarily be- cause of one-time termination and re- structuring expenses. The health system said that "consumer confidence and healthcare hesitation as a result of COVID-19 continue to affect Ascension markets, to varying degrees." For the three months ended Sept. 30, Ascension recognized $184.9 million in federal relief funding. n

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