Ascension’s financial recovery undermined by ransomware attack

The health care system “was built to weather a storm like this,” said executive vice president and chief financial officer Saurabh Tripathi.

Ascension’s revenue last year is a perfect example of the significant impact a cyberattack can have on its financial results.

The St. Louis-based hospital was on track for a significant financial recovery before it was hit by a ransomware attack in May that crippled operations and led to a net loss of $1.1 billion for fiscal 2024.

Recent cyberattacks on Ascension, Change Healthcare and other organizations have highlighted how important it is for healthcare leaders to invest in cybersecurity to protect against disruption and loss of revenue.

In the case of Ascension, the health system reported a recurring operations loss of $79 million during the first 10 months of the fiscal year, a marked improvement from a loss of $1.2 billion reported during the same period the previous year.

However, a ransomware attack caused a significant downturn in the last two months of the fiscal year, forcing Ascension to end the year with an operating loss of $1.8 billion.

“This incident resulted in delays in revenue cycle processes, including insurance verification, claims submission and payment processing, as well as certain remediation costs, which collectively resulted in a negative impact on operating results and cash flow in May and June 2024,” Ascension wrote in its report. earnings report.

The system has seen encouraging growth in patient volume over the first 10 months: emergency room visits increased by 2.5%, inpatient surgery visits increased by 2%, outpatient surgery visits increased by 0.5%, and visits per provider increased by 3.9%. In May and June, same-site patient volume decreased by an average of 8% to 12% compared to the same period last year.

Even after feeling the financial impact of the cyberattack, the system’s operating margin improved by $1.2 billion compared to a $3 billion operating loss in fiscal 2023. Meanwhile, the net loss narrowed from $2.7 billion in fiscal 2023 to $1.1 billion, including operating and non-operating items.

Saurabh Tripathi, executive vice president and chief financial officer of Ascension, said the operator is now focused on increasing patient volume as it recovers from the incident in May.

“Despite the temporary impact of the cybersecurity incident, Ascension’s balance sheet and liquidity position remain strong and there is sufficient liquidity to continue providing care to patients,” Tripathi said in a statement. statement“Ascension’s solid financial foundation, with a strong balance sheet of approximately $41 billion in assets and more than $15 billion in liquidity, was built to weather such a storm. With the strong momentum behind our operational improvements, I am confident that Ascension’s best days are yet to come.”

The Catholic nonprofit also aggressively divested assets to shrink its portfolio, cut expenses and strengthen its core markets.

This year, Ascension has entered into sales agreements nine hospitals in Illinois to Prime Healthcare and a five-hospital system to UAB Health.