Now three-quarters of the way through its fiscal year, Ascension has cut its operating losses by more than half and more than tripled its bottom line profits.
The nonprofit system on Friday reported an operating loss of $203 million (-1.1% operating margin) for the nine months ended March 31, 2026, improving on the operating loss of $466 million (-2.3%) from the previous fiscal year.
Both its total operating income and operating expenses decreased from the previous year due to a series of divestitures. The former decreased 7.2% to $18.1 billion, while the latter fell 8.1% to $18.3 billion; On a same-facility basis, total operating income grew 9.3% while expenses increased 5.7%.
“Consistent and focused operational efforts are leading to improved financial performance across the system,” Saurabh Tripathi, Ascension’s executive vice president and chief financial officer, said in a statement. “We are seeing a $262 million year-over-year improvement in operating revenue and a 4.1% operating EBITDA margin year-to-date, driven by higher volumes, improved efficiency and more consistent operational execution. We maintain discipline in cost management and capital deployment, which strengthens margins while allowing us to continue investing in clinical access and capabilities that support our mission.”
Commentary shared in a statement and regulatory filing described vastly improved performances across all of the health system’s critical care facilities and the fruit of a strategic expansion in outpatient access points.
Same-facility equivalent discharges grew 0.3%, inpatient surgery visits increased 1.5%, and outpatient surgery visits increased 1%. Emergency room visits were the exception, “deviating slightly from trend” with a 0.4% decrease that the administration said reflected national trends tied to a weak respiratory season. Meanwhile, Ascension’s average length of stay at the same facility fell 1.5% even as its patients’ acuity increased 2.7%.
“These volume trends demonstrate sustained progress in executing the organization’s strategic initiatives,” management wrote in a document. “Ascension is evolving alongside patient preferences, prioritizing the shift of select procedures to outpatient settings. Continued growth in partnerships with ambulatory surgery centers remains a pillar of this strategy, driving broader access to high-quality, patient-centered care.”
In addition to changes in volume, Ascension’s net patient services revenue benefited from an 8.9% increase per equivalent discharge at the same facility, but was also impacted somewhat by a change in payer mix.
“While reimbursement rates have provided limited mitigation to rising costs over the past two fiscal years, recent managed care negotiations with commercial payers have generated larger increases, improving [net patient service revenue] rates,” management wrote.
As for expenses, Ascension saw a 5.4% increase in cost per equivalent discharge driven by “targeted investments to support higher patient acuity and higher volumes,” management wrote. Spending on salaries, wages and benefits grew 3.3% in the same model, and average hourly wages increased 3.2%. Supply costs to the same facilities increased by 9.5%.
Beyond operations, Ascension’s nine-month net investment income rose $157 million year over year to $1.1 billion.
This helped boost nine-month net income of $621 million, up from $195 million last year. The system also recorded $2.1 billion in total community benefits spending during the same period, which was behind $2.6 billion the previous year and was largely explained 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 Ascensión, 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 the way we invest and operate. Our approach is simple: provide care in the right setting, at the right time and with the right support. This 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 leading nonprofit health system whose operations and results are on an upward trajectory. Kaiser Permanente recently reported a lower operating margin that was offset by investment gains, while CommonSpirit Health reported an operating loss of $578 million (-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.
