The nonprofit health system experienced an encouraging turnaround in operating performance this past year.
Trinity Health, like several of its Catholic nonprofit peers, is trending positively with its finances.
In its earnings report for the fiscal year ending June 30, the Livonia, Michigan-based hospital operator posted an operating income of $66 million (0.3% operating margin before other times), a reversal from the $288 million loss it suffered in the previous period. Operating cash flow also went up considerably, jumping to $1.2 billion for a growth of 47.9% year over year.
Trinity attributed the increases to multiple factors, including the management of expenses.
“Improvements were attained in payment rates, same facility patient care volume growth and several revenue and cost management initiatives that improved operations,” the system wrote its in report. “These improvements were partially offset by unfavorable service and payer mix shifts.”
Operating revenue grew by 10.5% to $23.9 billion, with the acquisitions of MercyOne, North Ottawa Community Health System, and Genesis Health System accounting for $1.1 billion of the increase. Acquisitions and divestitures aside, Trinity’s operating revenue climbed $1.2 billion, or 6.2%, year over year.
The system was able to control costs to the tune of an 8.8% increase to $23.8 billion, with an emphasis placed on bringing down labor expenses. Through investments in the FirstChoice internal staffing agency and TogetherTeam Virtual Connected Care model, Trinity was able to bring down contract labor costs by 25.5% to $81.4 million.
On a same facility basis, salaries and wages grew by 6.2% to $558.2 million as the system “continues to implement initiatives to address industry wide staffing shortages and wage inflation.”
Though Trinity’s operations fared well, its bottom line reflected a decline from $959.7 million in 2023 to $475.5 million for the past year. However, the system stated the drop was driven by the $754 million BayCare disaffiliation loss and reductions in contributions.
Some relief for Catholic systems
Like Trinity, other Catholic operators like CommonSpirit Health and Ascension reported improved earnings for 2024.
While CommonSpirit remains in the red, the Chicago-based organization slashed its operating loss from $1.2 billion to $875 million and pointed to struggles with payers on delays and denials for holding back greater gains.
In Ascension’s case, the ransomware attack it suffered in May also kept the system from a healthier bottom line.
Through the first 10 months of the fiscal year, the St. Louis-based company reported a loss from recurring operations of $79 million, which was a major improvement from the $1.2 billion it lost the previous year. After the ransomware attack led to a $1.1 billion net loss, Ascension finished with an operating loss of $1.8 billion.
Despite the challenges faced over the past year, Catholic systems have shown that they have reason for optimism heading forward.