HMGT 3311 Healthcare Acct

September 24, 2014

Harrison Ngo

Ascension Health
History
Ascension Health is a Catholic not-for-profit organization that operates a network of healthcare
facilities and hospitals throughout the United States. The organization was formed in November
1, 1999 through the union of Daughters of Charity National Health System and it is based in St.
Louis, Missouri. The Sponsors and participating entities of the organization consist of
Daughters of Charity, Congregation of St. Joseph, Sisters of St. Joseph of Carondelet, Alexian
Brothers, and Sisters of Sorrowful Mother. The organization is comprised of ninety-three
hospitals, which makes Ascension Health one of the largest parent companies of hospital
management in the nation.

Financial Ratios
Total Profit Margin = 2.52% (Avg. = 6.8%)
Net Income: $39,725,500
Total Revenue: $1,573,954,700

Operating Margin = 2.77% (Avg. = 5.5%)

Net Income from Operations: $301,348,900
Operating Revenue: $1,709,721,000

Return on Assets = 10.03% (Avg. = 9.5%)

Net income from Operations: $301,348,900
Total Assets: $3,004,737,100

Return on Total Equity (Net Assets) = 17.59% (Avg. = 26.3%)

Net income from Operations: $301,348,900
Total Equity (Net Assets): $1,713,116,800

Current Ratio = 8.86 (Avg. = 2.0)

Current Assets: $487,224,500
Current Liabilities: $542,990,100

Debt Ratio = 42.98% (Avg. = 63%)

Total Liabilities: $1,291,620,300
Total Assets: $3,004,737,100

HMGT 3311 Healthcare Acct

September 24, 2014

Harrison Ngo

Times interest earned (TIE ratio) = 3.44 (Avg. = 5.9%)

Net income: $301,348,900
Interest Expense: $87,496,500

Fixed Asset Turnover Ratio = 1.86 (Avg. = 31.4)

Total Revenue: $1,573,954,700
Net Fixed Assets: $845,687,300

Total Asset Turnover Ratio = 0.5 (Avg. = 1.4)

Total Revenue: $1,573,954,700
Total Assets: $3,004,747,100

Discussion of Financial Ratios

Ascension Health is known to be a very successful non-profit healthcare system and one
of the largest parent companies in the nation. That being said, this case study is not just
specifically focused on one of their ninety-three hospitals in the nation but rather Ascension
Health as a whole. Because of this factor, the numbers and statistics from above are not true
for all hospitals in the system. The total profit margin and operating margins numbers are
pulled from the Ascension Health 2013 fiscal report. These numbers show that the healthcare
system is in the positive and is gaining revenue but not enough to match industry averages. On
the other hand Ascension Healths returns on their assets and total equity is above average as
seen in the statistics. They have a 10.03% Return on Assets and a 17.59% in returns on total
equity. This shows that they are generating 10.03 cents in profits and 17.59 cents in income.
This is usually very important for investors in the businesses because this reflects on how the
managers are making use of the organizations Capital. Now moving on, as stated in the book
an industrys average debt ratio is roughly 63% while Ascension Healths debt ratio is calculated
to be 42.98%. This is 20% lower than the national average this indicates that ascension is
making use of their capital and can create more services than intended with the contributions
they received initially. This is in part to Ascensions attempt to pull resources to expand on
more and improve their hospital environment.
I have read through some reviews and articles about the company and found that
ascension are committed to their goal, which is to expand upon its services and focus on the
different needs for all individuals. This is an excellent goal for a company to try to meet the
needs and the demands of all their customers, but this can actually decrease the actual focus of
each department because they then have to worry more about the costs of their resources.
Ascension Health is committed to call to action, healthcare that leaves no one behind so then

HMGT 3311 Healthcare Acct

September 24, 2014

Harrison Ngo

the healthcare system attempts to expand and create a more diverse healthcare environment,
but in the process the resources are then split to fund different projects. Although Ascension
sticks to their goal of meeting the needs of everyone, their focus could be improved.
Researching more into the company, majority of the employees complain how
management worries more about profit, numbers, and costs rather than focusing on patients.
As a non-profit organization it is expected that with contributions as your primary resource to
fund services, it is difficult to create profit but it shouldnt be the focus. Some employees say
that managers are disconnected from the staff and the patients, which in turn makes it more
difficult to uphold the companys missions and goals. This creates an agency problem, which is
where managers of corporations are motivated to act in their own interests as opposed to the
interests of the organization as a whole. It is an even bigger issue because of the fact that, but
shouldnt be the primary goal. Another issue that is prominent in the system is that the
technology is not up to par. This can be contributed to the fact that Ascension Health is so
focused on trying to expand during the year of 2013 and still now, that not enough resources
are funding the improvement of technology for patients. So if ascension can allocate their
resources more evenly, it can improve their all-around services.

Other Narrative
Joint Venture for Home Care
Ascension had entered into an agreement with the organization Evolution Health to create a
joint venture. This would provide home care, hospice care, and infusion therapy for patients
that live in communities that are served by the Ascension Health Ministries. Ascension believes
that this will improve on their goal on having no one left behind and increase their range of
services for those in need.
Healthcare That Leaves No One Behind
Ascension follows a leave no one behind moto. This is where they strive to help as many people
as they can expand to areas that are in need of more health and medical services.
System Statistics
These are just some statistics recorded on their website for the year of 2013:
They had 75, 046 births recorded, 716,284 discharges, 2,594,566 emergency visits, 7,727,549
physician visits, 1,1785,506 clinic visits, and 18,793,490 outpatient visits (these exclude
emergency visits). These numbers are crucial to show how many individuals choose to go to a
branch of Ascension Health system, as well as what services are being used.

HMGT 3311 Healthcare Acct

September 24, 2014

Harrison Ngo

Bibliography
Ascension Health
http://www.ascensionhealth.org/

Ascension Health News Room

http://www.ascension.org/newsroom

Consolidated Financial Statements and Supplementary Information for Years Ended June 30,
2013 and 2012.
http://www.ascensionhealth.org/assets/docs/Consolidated_Ascension_Health_Alliance_Audite
d_Financial_Statements_for_the_Year_Ended_June_30_2013.pdf