CHICAGO – Sept. 21, 2023 – CommonSpirit Health released financial results today for its 2023 fiscal year, which ended June 30. The health system reported revenues of $34.6 billion, an increase of 0.5% over the prior year, when normalizing the results for income yet to be recognized for the California Provider Fee program awaiting CMS approval. Expenses were $35.9 billion, a 1.4% increase over the prior year, resulting in an operating loss of $1.3 billion, or -3.9% margin. EBITDA was $663 million, a 1.9% margin.
CommonSpirit focused its efforts in Q4 on growth, reducing labor costs, including contract labor, enhancing revenue yield, optimizing length of stay, and continued value capture efforts, which resulted in strong financial performance for the quarter, with an EBITDA of $432 million and an EBITDA margin of 4.7%.
Revenue was bolstered by an increase in patient volumes, which reached pre-pandemic levels in many of the health system’s markets. However, private and government reimbursements did not keep pace with increased costs of providing care to patients. A focused effort to appropriately decrease patients’ length of stay, which had increased significantly due to the lack of available post-acute care options since the onset of the COVID pandemic, mitigated some of these effects. Financial performance was also impeded by continued labor shortages and inflation, declining acuity and rates, costs associated with managing the October 2022 ransomware attack and charges related to workforce reductions.
“Like the rest of the health care industry, CommonSpirit continues to be affected by inflation, the continued labor shortage and challenging dynamics with payers,” said CommonSpirit Chief Financial Officer Dan Morissette. “Given those headwinds, we continue to focus on initiatives and opportunities that allow us to pursue growth, reduce costs and increase efficiency, while at the same time investing appropriately in developing the workforce of the future.”
In addition to a 4.4% increase in same-facility adjusted admission volume, CommonSpirit’s performance was strengthened by the implementation of internal referral systems, the expansion of transfer centers, the development of standardized templates to increase capacity in outpatient settings and various patient-facing tools to improve access to the health system. CommonSpirit also undertook several initiatives to standardize its supply purchasing processes, reduce administrative positions, minimize office space and standardize physician professional fee contracts. CommonSpirit also completed the acquisition of five hospitals and more than 40 clinics from a single, regional health system in Utah in May 2023.
Continuing its long-standing work to develop programs to reduce employee turnover and increase employee satisfaction, CommonSpirit marked the start of its Nurse Residency Program. CommonSpirit welcomed newly hired graduate nurses from the program to 36 CommonSpirit training sites in FY23, with plans to significantly augment the program in the next two years. In addition, CommonSpirit launched its virtually integrated nursing program, which partners bedside nurses with nurses monitoring patients from remote locations. This ensures that patients get the best care possible, that bedside nurses get the support they need, and that experienced nurses enjoy additional professional opportunities.
Since joining CommonSpirit one year ago, CEO Wright Lassiter III has been committed to improving CommonSpirit’s performance and transforming the organization to meet the changing health care needs of its patients and communities.