Advocate Aurora Health saw revenue increase year over year in the first quarter of this year, but it ended the period with an operating loss, according to recently released unaudited financial documents.
Advocate Aurora Health, which was formed in 2018 and has dual headquarters in Downers Grove, Ill., and Milwaukee, reported revenue of $3.1 billion in the first quarter of 2020, up from $3 billion in the same period a year earlier. Patient service revenue climbed 3.5 percent year over year, while capitation revenue dropped 13.2 percent.
The health system said it began postponing or canceling elective procedures on March 17 due to the COVID-19 pandemic, and the public curtailed visits to physicians, clinics and emergency rooms for fear of contracting the virus.
“These actions have served to decrease revenues from non-COVID-19 patients while driving up costs to prepare for and care for COVID-19 patients with minimal additional revenues from these patients,” Advocate Aurora said.
To help offset financial damage caused by the COVID-19 pandemic, the health system implemented cost-reduction measures. Since April 1, it has also received $328 million in grants made available through the Coronavirus Aid, Relief and Economic Security Act and about $730 million in advance Medicare payments, which must be paid back.
Advocate Aurora’s expenses were up 9 percent in the first quarter of this year compared to the same period of 2019. The increase was due in part to it acquiring the remaining 51 percent interest in Bay Area Medical Center in Marinette, Wis., in April 2019.
Advocate Aurora posted an operating loss of $85.6 million in the first quarter of this year. That’s compared to operating income of $112.8 million in the same period a year earlier. Excluding nonrecurring expenses, the health system posted an operating loss of $49.3 million in the first quarter of this year and operating income of $131.2 million a year earlier.
The 26-hospital system reported a nonoperating loss of $1.23 billion in the first quarter of this year, which was largely attributable to investment losses. Advocate Aurora ended the first quarter with a net loss of $1.3 billion, compared to net income of $596.8 million a year earlier.
As of March 31, the health system had 229 days cash on hand, down from 274 days in December 2019.