Trinity Health Posts Net Loss So Far in 2023, But Revenues Rise YOY

Operating expenses increased $674.1 million, or 6.7% during the first six months of fiscal 2023.

Trinity Health, one of the largest healthcare systems in the country, announced its financial results for the first six months of fiscal 2023.

The organization posted a six-month operating loss of $298 million as growth in expenses outpaced a rise in revenue.  Trinity Health reported a 2.3% year-over-year increase in operating revenue of $10.5 billion for the first half of the fiscal year. The healthcare provider says the growth in revenue was due largely to its acquisition of MercyOne in Iowa on September 1, 2022, and North Ottawa Community Health System in Michigan on October 1, 2022. These purchases added $535.8 million of operating revenue during the first six months of the fiscal year. Excluding the Acquisitions, revenue declined $300.7 million or 2.9% over the same period in the prior fiscal year, driven by a $228.9 million reduction in other revenue which includes the decrease in PRF grant revenue, along with reductions in gain share revenue of $37.2 million.

Operating expenses increased $674.1 million, or 6.7% during the first six months of fiscal 2023, Trinity Health reports. Downward pressure on margins in the first six months of the fiscal year was due to controlled expense growth that is still outpacing revenue growth, the organization says. Labor rates are also adding to this margin pressure.

"The Corporation is focused on clinical optimization and access, revenue growth opportunities, labor retention, recruitment and stabilization, new care delivery models including the launch of a new 3-person team model with on-site and virtual nursing named "TogetherTeam" that will be implemented system-wide over 17 months, and continued cost reduction plans to improve operating performance during the remainder of fiscal year 2023," Trinity Health said in its report. " The Corporation continues to use strong cost controls over contract labor and other operational spending as colleague investment and utilization of its FirstChoice internal staffing agency promotes labor stabilization. As a result, excluding the impact of the Acquisitions, contract labor costs decreased $82.5 million or 31.1% in the first six months of fiscal year 2023 compared to the same period in the prior fiscal year. Further expense reductions were seen in purchased services, depreciation and amortization, and supplies, with a 1.9% improvement in supply costs as a percentage of net patient service revenue as the Corporation works to align expenses with revenue."