Becker's Hospital Review

11 CFO / FINANCE Mercy Health's operating income up more than $145M in fiscal 2024 By Andrew Cass S t. Louis-based Mercy Health posted an operating income of $157.4 million (1.7% operating margin) in fiscal year 2024, up from an operating income of $11.8 million (0.1% operating margin) in 2023, according to its Sept. 19 financial report. The system reported total operating revenues of $9.3 billion for the year ended June 30. Patient service revenues were $8.3 billion, up from $7.3 billion over the same period last year. Capitation revenues were $418.4 million, up from $237.4 million over the same period in 2023. Total operating expenses were $9.1 billion, up from $8 billion in 2023. Salary and benefit expenses were $5.1 billion, up from $4.6 billion over the same period last year. Supply and other expenses were $3,4 billion, up from $2.9 billion last year. Medical claim expenses were $199.2 million, up from $102.7 million last year. Mercy Health posted a net income of $539.7 million in 2024, up from a net income of $179.9 million last year. n roll out innovative technologies in a broader way rather than hanging their name on the product they built?" Ultimately, consolidation in banking led to fewer, larger institutions dominating the market, which reduced competition and gave consumers fewer choices. is led to increased costs and reduced the availability and quality of basic financial services for consumers. Similarly, an analysis of 1,164 mergers among the country's 5,000 acute-care hospitals between 2000 and 2020 found that those transactions increased healthcare prices by 5.2%. e study, published in American Economic Review: Insights, found that 90% of hospital markets are highly concentrated. e study demonstrates that hospital consolidation can decrease competition and drive up healthcare costs for patients, limit provider choice and reduce care quality. Health systems may need to consider ways to maintain competition and patient choice, even as they merge. "Having been through multiple mergers in the financial sector, I am not sold that bigger is always better. Big can make it really hard to differentiate," Ms. Perrotty said. "You've got to be really skilled to make the human capital piece work as well as the financial capital in large enterprises." Larger banks were deemed "too big to fail," but when many did during the 2008 financial crisis, the federal government was forced to intervene, with bailouts having far-reaching economic consequences. If large consolidated health systems become "too essential to fail," failures or financial distress could jeopardize healthcare access across entire regions. Hospitals are already facing increased scrutiny from federal and state regulators, and policymakers may need to consider how to regulate and safeguard large health systems to prevent disruptions in care in the future. n Ascension posts $1.8B annual loss; liquidity 'remains strong,' CFO says By Alan Condon S t.-Louis-based Ascension reported a $79 million operating loss (-0.3% margin) for the 10 months ending April 30, a substantial improvement on the $1.2 billion operating loss in the previous 10-month period. e results include $402 million in one-time, non-cash write-downs and non-recurring losses. In May and June 2024, operations were hampered by the May ransomware attack, resulting in reduced revenues from the associated business interruption along with costs incurred to address the issues and other business-related expenses. Despite this incident, Ascension drove a $1.2 billion operational improvement year over year for the 10 months ending April 30. e 136-hospital system's economic improvement plans focused on volume growth, rates and pricing, and cost levers. e results are a notable improvement on the $3 billion operating loss (-5.5% margin) reported in fiscal year 2023. Including the cyberattack, Ascension reported a $1.8 billion (-4.9% margin) loss in FY 2024. Ascension is also reorganizing its portfolio with several transactions in multiple markets. "Our focus on data-driven decisions, financial discipline, and most importantly the needs of communities we serve has strengthened Ascension's foundation, and put us on a great path as we look to the future," President Eduardo Conrado said. "ese accomplishments reinforce our mission and ensure we continue delivering exceptional care while deepening trust in our communities." For the ten months ended April 30, Ascension reported a 5.2% year- over-year increase in total operating revenue. With the inclusion of May and June, FY24 operating revenue increased 0.7% while FY24 operating expenses grew by 0.4%. e cyberattack also affected accounts receivable. Ascension's days

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