Tuesday , June 15 2021

Health systems’ Q1 financial reports signal further COVID-19 recovery

The finances of several not-for-profit health systems perked up in the first three months of 2021 compared to the prior-year period—which mostly preceded the COVID-19 pandemic—although executives say they still face a number of challenges.

Large providers like Henry Ford Health System, Mass General Brigham and RWJBarnabas Health had either moved into the black or strengthened operating profit in the quarter ended March 31. Finances are generally still weaker than they were pre-pandemic. On top of that, executives said the unpredictability of COVID surges since March 2020 has made planning difficult.

“Everything has been disrupted,” said Mike Allen, chief financial officer of OSF HealthCare, a 14-hospital system based in Peoria, Ill. “All the normal patterns of life have been disrupted, and that includes healthcare.”

OSF’s Allen said it’s hard to compare the two periods because circumstances were so different, although he noted that patients are now returning for care they put off during the worst of the crisis. OSF’s outpatient visits were up 12.5% year-over-year.

Other big systems, like CommonSpirit Health and ProMedica Health, lost money in the recently ended quarter excluding grants as both organizations struggle to fully regain volumes in their hospitals and senior care facilities.

The first three months of 2020, by contrast, were mostly unaffected by the pandemic, except for the final two weeks of March. At that point, cases spiked and many of the country’s healthcare providers suspended elective procedures, sending revenue over a cliff. The 2020 quarter does not include aid from federal relief grants, which some systems recorded in the first quarter of 2021.

Robin Damschroder, chief financial officer of Detroit-based Henry Ford Health System, said the economy had already been cooling off before the pandemic, so Henry Ford’s volumes had already been down in the first quarter of 2020.

She agreed with Allen that it’s difficult to compare the first quarters of 2020 and 2021, as the mix of services Henry Ford provided in the recently ended quarter are different, with fewer orthopedic surgeries and more COVID patients.

Looking forward, Henry Ford is “cautiously optimistic,” Damschroder said. “We expect volatility on volume.”

Some highlights from the first quarter of 2021:

  • CommonSpirit Health: The 140-hospital, Chicago-based system posted an operating loss of $117 million in the three months ended March 31, 2021 excluding federal grants and a pre-tax gain on the sale of joint venture shares. Including those items, the system generated $539 million in operating income in the quarter ended March 31, 2020. That’s compared with a $145 million loss in the prior-year period, a 2% loss margin. CommonSpirit said it continues to struggle with patient volumes and the ongoing impact of the pandemic.
  • ProMedica: The Toledo, Ohio-based health system had a rocky start to 2021, posting a 4.2% operating loss margin in the first three months. The health system was weighed down by its senior care division, which posted an 11% loss margin. Nursing homes have been particularly hard hit during the pandemic, and continue to see occupancy declines and job losses. At ProMedica, skilled nursing occupancy was 68% in the first quarter of 2021, down from 84% in the first quarter of 2020. ProMedica’s assisted living occupancy was down to 61% in the recently ended quarter, compared with 81% in the 2020 period. ProMedica’s provider division, which includes 12 hospitals, posted a 1.2% loss margin. The bright spot in ProMedica’s financials was its insurance division, Paramount, which posted a 4.1% operating margin.
  • RWJBarnabas Health: The New Jersey system posted a very slim 0.1% operating margin in the first three months of 2021, compared with a 3.8% loss margin in the prior-year period. About half of the $54 million positive operating income swing was federal grant money. RWJ’s outpatient volumes increased about 1.9% year-over-year, primarily due to hospital same-day surgeries growing 6.9%. The system admitted 6,111 COVID patients during the first quarter of 2021, compared with 1,952 in the prior-year period.
  • Ochsner Health: Louisiana’s Ochsner experienced a modest rebound in the first quarter of 2021, posting $15.1 million in operating income—a 1% margin—compared with a $32.8 million loss in the comparable 2020 period, a 3.4% loss margin. Ochsner said its COVID patients peaked at 973 on April 7, 2020, and ultimately dropped to a low of about 100 patients in April 2021 after a third peak in January 2021. By the end of June 2020, Ochsner said clinic visits and outpatient surgeries were close to pre-pandemic levels.
  • BJC HealthCare: St. Louis-based BJC generated $35 million in operating income in the first quarter, a 2.4% margin, compared with just $4.5 million in the 2020 period, a 0.3% margin. BJC’s admissions, inpatient surgeries and emergency room visits were still down year-over-year, but outpatient surgeries grew by almost 5% in that time.
  • Mass General Brigham: If the Boston-based system hadn’t taken in any federal grants in the quarter ended March 31, 2021, it would have posted $18 million in operating income, a 0.5% margin. That’s compared to a $178 million operating loss in the comparable 2020 period, during which the system weathered the initial shutdown in elective procedures and expenses related to preparing for the pandemic. Including federal grants, the system posted $250 million in operating income in the recently ended quarter. Mass General Brigham has treated almost 19,000 COVID patients, including a peak of 925 in April 2020 and a second surge of more than 400 in January 2021.
  • Henry Ford Health System: The Detroit system lost $16 million on operations in the first quarter of 2021—a 1% loss margin—which was narrower than its $36.2 million loss in the comparable 2020 period, a 2.4% loss margin. The number of COVID patients the system was treating had declined to just over 100 at the end of February 2021. However, beginning in March through the middle of April, COVID cases jumped across the state. Henry Ford hit a peak of over 600 patients admitted by mid-April 2021 before declining to 300 patients by early May. Henry Ford saw some volume recovering in the 2021 period, with outpatient surgeries up 12.8% year-over-year. Inpatient surgeries grew 3.9% in that time.
close
Trending News

Sign up to receive Top trending , and keep up to date on our latest news!

We don’t spam! Read our privacy policy for more info.

About trendingnews

Check Also

Humana to acquire home health provider One Homecare Solutions

Humana on Monday announced it had signed a definitive agreement to purchase One Home Healthcare …

Leave a Reply

Your email address will not be published. Required fields are marked *