Ascension has opened its 2026 fiscal year with a $133 million improvement on operations and a $337.7 million bottom line, the large Catholic system disclosed Friday.
For the three-month period ended Sept. 30, the nonprofit posted an $87.9 million operating loss (-1.4% operating margin) as opposed to the prior year’s operating loss of $221.3 million (-3.0% operating margin).
The system’s $337.7 million net gain (attributable to controlling interests) was a step back from the $387.1 million of the year before, due to reduced net investment return. Still, the tightened performance drew a stronger 3.4% recurring operating EBITDA margin and optimism from Ascension’s executives.
“Our first quarter results show the strength that comes from focusing on our strategy and staying true to our Mission,” Eduardo Conrado, president and CEO-in-waiting, said in a release. “We are managing resources with discipline, investing where it matters most and supporting the teams who care for our patients and communities. When strategy, Mission, investment and talent come together, we build lasting momentum that strengthens our ministry and allows us to serve more people with compassion and excellence.”
Ascension’s total operating revenue dipped by $954.4 million, or 13.5%, to $6.1 billion compared to the beginning of its prior year due to divestments. On a same-facility basis, however, it grew $778 million year over year, or 14.8%, and was $359 million higher than the immediately preceding quarter.
The system highlighted substantial increases to net patient service revenue per equivalent discharge of 17.9% overall and 10.8% on a same-facility basis. Among these gains, management in a filing highlighted slight increases in commercial and managed care payer mix, higher inpatient acuity and favorable managed care rates negotiated with commercial payers.
Additionally, Ascension saw a 1.4% year-over-year increase in same-facility equivalent discharges, which management said was spread across most volume indicators with the exception of outpatient surgeries and per-employed-provider patient encounters. In a release, the company said these increases were “supported by strategic investments in ambulatory services, service line development and community-based care.”
Ascension cut its expenses for the quarter by $1.1 billion, or 14.7%, to $6.3 billion due in large part to the divestitures. On a same-facility basis, the increase was narrowed to $451 million, or 7.9%.
Same-facility cost per equivalent discharge rose 6.3% year over year, which was well behind the quarter’s per-patient revenue gain. Average length of stay improved by 2.2% despite a 2.7% rise in patient acuity, “further demonstrating enhanced care coordination and throughput efficiency,” management said. Same-facility total salaries, wages and benefits spending rose 3.9% due in large part to acuity and volume, even as average hourly wage rates rose 6.6% as a result of “continued investments in market competitiveness and retention efforts,” management added.
“We are continuing to see the results of a steady and disciplined approach to improving operating performance,” Saurabh Tripathi, executive vice president and chief financial officer, said. “By managing our resources wisely and investing them in the areas that matter the most, we are strengthening our ability to serve patients and communities."
The system said it has 235 days of cash on hand as of Sept. 30, an increase of seven days from the prior three-month period.
Ascension’s release announcing the quarter’s performance, as well as another from the day before announcing its 2025 annual impact report, underscored highest-ever quality and patient experience scores across the organization. Recently awarded Centers for Medicare & Medicaid Services Star Ratings were 3.48 systemwide as opposed to the national average of 3.13. The organization also said it received a Net Promoter Score of more than 80, while its complaints are down by 11%.
Ascension also announced, across fiscal year 2025, it spent $1.7 billion in discounted care for poor patients and other community benefit investments, alongside a $1.8 billion unreimbursed Medicare shortfall. For the recently closed quarter, total community benefit was $755 million, the majority of which was Medicare shortfall.
Ascension wholly or partially owns 121 hospitals and runs a clinical services network of more than 1,650 additional sites across more than a dozen states. The Catholic giant employs 99,000 associates and more than 38,000 other nurses and clinicians. Ascension wrapped its 2025 fiscal year with a $490.9 million operating loss (-1.9% operating income) but a $917.7 million net income, which was an improvement over the prior fiscal year.
Its improving operations come alongside new pushes toward efficient innovation and ambulatory care. For the former, the organization recently unveiled a Clinical Innovation Institute to vet and deploy new technologies across the Catholic nonprofit. In June, it announced a major deal reportedly valued at $3.9 billion to acquire ambulatory surgery management services company AmSurg and its more than 250 outpatient sites.