Now three quarters into its fiscal year, Ascension has chopped down its operating losses by more than half and more than tripled its bottom-line gain.
The nonprofit system reported Friday a $203 million operating loss (-1.1% operating margin) for the nine months ended March 31, 2026, improving on the $466 million operating loss (-2.3%) for the prior fiscal year.
Both its total operating revenue and operating expenses dipped from the prior year due to a slew of divestitures. The former declined by 7.2% to $18.1 billion while the latter fell by 8.1% to $18.3 billion; on a same-facility basis, total operating revenue grew 9.3% while expenses increased 5.7%.
“Consistent and focused operational efforts are leading to better financial performance across the system,” Saurabh Tripathi, executive vice president and chief financial officer of Ascension, said in a statement. “We are seeing a $262 million year-over-year improvement in operating income and a 4.1% operating EBITDA margin year to date, driven by higher volumes, better efficiency and more consistent operational execution. We are maintaining discipline in cost management and capital deployment, which is strengthening margins while allowing us to continue investing in access and clinical capabilities that support our mission.”
Commentary shared in a release and regulatory filing described broadly improved performances across the health system’s acute care facilities and the fruit of a strategic expansion in outpatient access points.
Same-facility equivalent discharges grew 0.3%, inpatient surgery visits rose 1.5% and outpatient surgery visits increased by 1%. Emergency room visits were the exception, “deviating slightly from the trend” with a 0.4% decline that management said reflected national trends tied to a weak respiratory season. Meanwhile, Ascension’s same-facility average length of stay fell by 1.5% even as its patient acuity rose 2.7%.
“These volume trends demonstrate sustained progress in executing the organization’s strategic initiatives,” management wrote in a filing. “Ascension is evolving alongside patient preferences, prioritizing the shift of select procedures to outpatient settings. The continued growth of ambulatory surgery center partnerships remain a pillar of this strategy, driving broader access to high-quality, patient-centered care.”
Alongside the volume changes, Ascension’s net patient service revenues benefited from a 8.9% increase per equivalent discharge on a same-facility basis, but were also somewhat impacted by a shift in payer mix.
“While reimbursement rates have provided limited mitigation to escalating costs over the last two fiscal years, recent managed care negotiations with commercial payors have yielded larger increases, improving [net patient service revenue] rates,” management wrote.
On the expense side, Ascension noted a 5.4% rise in cost per equivalent discharge driven by “targeted investments to support higher patient acuity and increased volumes,” management wrote. Salary, wages and benefits spending grew 3.3% on a same-facility basis, with average hourly wages rising 3.2%. Same-facility supply costs increased 9.5%.
Beyond operations, Ascension’s nine-month net investment gain rose $157 million year over year to $1.1 billion.
This helped fuel a nine-month net income of $621 million, up from last year’s $195 million. The system also flagged $2.1 billion of total community benefit spending during the same period, which was behind the prior year’s $2.6 billion and explained in large part by its reduced market footprint.
“These results show more consistent execution and a clearer focus on how we serve,” said Eduardo Conrado, president and CEO of Ascension, in a statement. “We are expanding access, strengthening our service lines and making care easier to navigate. At the same time, we are being disciplined in how we invest and operate. Our focus is simple: Deliver care in the right setting, at the right time, with the right support. That is how we improve the experience for patients and caregivers and ensure our mission continues to serve communities for years to come.”
Ascension joins Providence as a major nonprofit health system whose operations and bottom line are on an upward trajectory. Kaiser Permanente recently logged a slimmer operating margin that was offset by investment gains, whereas CommonSpirit Health reported a $578 million operating loss (-5.8% operating margin) during the third quarter of its fiscal year and its bottom line for the quarter was a loss of $762 million.
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