Trinity Health joins the chorus of nonprofit hospital chains operating well in the green through fiscal year 2021, reporting a total operating income of $658 million for the year ending June 30.
The system credited the turnaround from last year’s $345 million operating loss to payment rate increases and improvements in case mix that offset the pandemic’s impact on volumes. This translated to annual operating margins of 4.2% and 0.4% in fiscal years 2021 and 2020.
At the same time, the nonprofit system said it faced a $560 million (3%) increase in expenses during the year due to increased supply and labor costs. It also incurred a substantial amount of restructuring costs, some of which were driven by “a number of aggressive and proactive steps” taken in fiscal year 2020 “to position the corporation for financial recovery in fiscal year 2021.”
Trinity also noted its patient volumes are generally recovering but have yet to return to what it saw prior to the pandemic.
“The corporation expects patient volume growth to continue to be impacted by COVID-19 surge and recovery waves during fiscal year 2022,” the system wrote in a filed summary of its fiscal year.
Total operating revenue for the year was nearly $20.2 billion, up 7.1% from the previous year’s $18.8 billion. Net patient service revenue for the year increased by $1.3 billion. Trinity also recorded $618.8 million of Provider Relief Fund grant revenue during fiscal year 2021.
RELATED: Trinity Health mandates COVID-19 vaccination for all 117,000 employees, business partners
Year-over-year volumes increased 2.8% over fiscal year 2020. Surgeries grew by 12% (much of which was due to recent surgical hospital acquisitions), while emergency room visits and discharges dropped 10.1% and 5.4%, respectively from the previous year.
Among its nonoperating items, Trinity banked nearly $2.3 billion in earnings from its investments. This was up from $176 million in fiscal year 2020.
The system reported total assets of $33.6 billion and net assets of $18.5 billion as of the fiscal year’s close. It has unrestricted cash and investments of $12.8 billion and 254 days of cash on hand.
According to the filing, the nonprofit spent nearly $1.2 billion on community benefits, a decline from the over $1.3 billion it spent the previous year.
Michigan-based Trinity Health is among the largest Catholic healthcare systems in the country. It has 90 hospitals and 100 continuing care locations across 22 states. It employs roughly 123,000 people, including 6,800 employed physicians and clinicians, according to its website.
The system joins fellow nonprofit giants CommonSpirit, Ascension and Advocate Aurora reporting a steady, but not full, rebound in revenues and earnings partially attenuated by increased expenses.
Trinity’s outlook for the coming year also falls in line with the industry’s expectations. A recent analysis from the American Hospital Association and Kaufman Hall estimates that the nation’s hospitals will lose $54 billion in net income this year due to higher expenses and fewer outpatient visits caused by lingering COVID-19 interruptions.