Advocate Aurora Health has started its fiscal year in the black, reporting this week nearly $352 million in earnings for the quarter ending March 31 despite receiving no financial support from the government’s COVID-19 relief efforts during that time.
The performance is a stark contrast to the same period last year when the pandemic hit and the nonprofit system lost more than $1.3 billion after expenses.
Advocate Aurora said it is still unsure of the total impact COVID-19 will have on its financials due to the risk of continued supply disruptions, treatment deferrals and lower collections.
“The system continues to monitor liquidity and cash flow and has taken, and will continue to take, steps to protect its fiscal health, including a focus on maintaining liquidity to meet its obligations,” Advocate Aurora wrote in its most recent filing. “In addition, the system applied for certain COVID-19 related resources, including supplies, financial support, payroll tax deferrals and relief and other assistance made available through local, state and federal governments.”
The system, which runs 26 hospitals and more than 500 outpatient locations, reported $2.7 billion in patient service revenue (a 4.2% year-over-year increase) and $3.3 billion in total revenue for the first quarter. Total expenses landed at $3.2 billion, for an operating margin of 2%.
Year-over-year utilization was down across the board, with discharges and hospital outpatient visits falling 11.1% and 5.1%, respectively. Home care visits were the sole exception here, rising 8.9% compared to the first quarter of 2020.
Among the most substantial difference in Advocate Aurora’s year-over-year financials was its net investment incomes. Here, the health system reported $296 million in the first quarter of 2021 versus the loss of nearly $1.2 billion in the beginning of 2020, to which it attributed much of the blame for its poor performance that quarter.
Aurora said it has 335 days of cash on hand as of March 31, roughly the same as it had at the end of the previous fiscal year.
The quarter’s results come after the health system posted $558 million in full-year earnings for 2020. This was less than half of the $1.4 billion it had brought in during 2019, a drop the system attributed to declining patient volumes and other pandemic impacts.
Although Advocate Aurora did not post any federal relief funding for the most recent quarter, it reported receiving a total of $786 million from CARES Act support across 2020.
The Illinois- and Wisconsin-based system also recently outlined the opening positions taken by Advocate Aurora Enterprises, its new investment arm. These included the acquisition of Maryland-based home care company Senior Helpers and an investment in tele-nutrition platform Foodsmart.