Livonia, Michigan-based Trinity Health brought its six-month operating losses down from last year’s $270.3 million (-2.6% operating margin) to $38.6 million (-0.3% operating margin) thanks to higher volumes and “several revenue and cost management initiatives,” according to a financial filing released Friday.
Though Trinity reports its financials on a year-to-date basis, the faith-based provider noted that the trajectory of its margins improved from a loss in the first fiscal quarter, ended Sept. 30, to a gain in its most recent, ended Dec. 31. Its six-month bottom line has also risen year over year from a $70.5 million loss to a $669.1 million net income.
Trinity’s six-month operating revenue rose 11.3% year over year to $11.6 billion thanks in large part to its acquisitions. These included MercyOne in September 2022, North Ottawa Community Health System in October 2022 and Genesis Health System in March 2023, which brought a $692.3 million gain, but were partially offset by the divestiture of St. Francis Medical Center in December 2022, which pulled away $59.3 million.
Excluding these, however, still showed a 5.5% increase in revenues that Trinity said came from stronger patient volumes, a “multifaceted payer strategy … to obtain fair payment rate increases” (including a $121.6 million 340B program lump sum remedy payment) and, to a lesser extent, an improved case mix.
Trinity also highlighted a 1.5% rise in same-facility, case mix-adjusted equivalent discharges, but also noted that the majority of its revenue comes from outpatient and other non-patient sources.
“The Corporation continues to diversify its business segments to gain better position for balanced performance when individual segments are challenged,” management wrote in the filing.
Six-month operating expenses rose 8.8% to $11.7 billion with the various acquisitions and divestiture comprising a $694.3 million increase. Excluding those trimmed operating expenses to a 3.2% increase.
Total operating costs per case rose 0.7% year over year “as the corporation continues to tightly manage operating costs amid inflation,” management wrote. Among the standouts touted by Trinity was an expansion of its FirstChoice internal staffing agency, a virtual connected care delivery model and other recruiting efforts to stabilize the system’s labor pool. Though same-facility salaries, wages and employee benefit costs rose 4.7% year over year, same-facility contract labor has decreased by 24%.
Trinity logged $738.7 million in nonoperating income year to date, up from $264.6 million, thanks to an additional $341.2 million of investment earnings and other improvements. The system has 168 days of cash on hand as of Dec. 31.
Trinity Health now boasts more than 100 hospitals and serves more than 30 million people across 27 states, according to its website. The Catholic nonprofit is coming off of a fiscal year with $431.7 million in operating losses (-2% operating margin) yet nearly $1 billion in net income.
It joins the ranks of nonprofit systems reporting a marked improvement in volumes, cost management and other areas of operations during the most recent quarter. These include Ascension, Cleveland Clinic, Kaiser Permanente, Mass General Brigham and CommonSpirit Health.