CHICAGO – Nov. 15, 2022 – CommonSpirit Health released financial results for its fiscal year 2023 first quarter ended Sept. 30. The results reflected higher expenses impacting many health care providers, as well as efforts to boost productivity while maintaining and growing access to services.
CommonSpirit reported operating revenues of $8.53 billion and operating expenses of $8.75 billion, compared to $8.55 billion in revenues and $8.52 billion in expenses for the same period last year. The results are normalized for income recognized as part of the California Provider Fee program relates to prior fiscal year. The health system recorded operating income of $23 million and EBITDA of $495 million, a 0.3% and 5.5% margin, respectively. When normalized for income from the California Provider Fee program, there was an operating loss of $227 million and EBITDA of $245 million, a -2.7% and 2.9% margin, respectively.
“CommonSpirit Health continues to deliver essential health care services to communities across our 21 states, despite challenging and uncertain economic conditions,” said CommonSpirit Chief Financial Officer Dan Morissette. “We are leveraging our strengths as a large and integrated health care network to address nationwide labor shortages, maintain access to care and ensure we can sustain our operations. At the same time we are focused on improving care quality, reducing costs, and investing in new ways of delivering care.”
Results continued to be impacted by the pandemic, labor shortages, and inflation. The increase in expenses was driven by a 4.2% increase in salaries and benefits per adjusted admission, primarily due to higher contract labor costs, as well as overtime and premium pay. CommonSpirit has expanded a number of programs to retain and support its staff, including new wellness and educational programs. The organization has also worked to reduce contract labor costs, and saw a 43% reduction in these costs compared to its peak in March 2022.
Adjusted admissions on a same-store basis rose 2% compared to the prior year’s quarter, while outpatient visits declined slightly but remained above pre-pandemic levels. ED visits also saw a small decline, in part a result of acute care sites seeing fewer patients with COVID-19.
On Sept. 1, CommonSpirit and Trinity Health completed a transaction for Trinity to acquire full ownership of MercyOne, an Iowa-based health system that had previously been jointly owned by Trinity and CommonSpirit. CommonSpirit remains committed to growth in communities where it has the ability to deliver on its mission and create a continuum of ambulatory, acute, and post-acute services.
In a sign of confidence in CommonSpirit’s ability to improve performance, Fitch upgraded CommonSpirit’s debt rating to A- with a “Stable” outlook in September. Standard & Poor’s and Moody’s also affirmed their A-/Stable and Baa1/Positive ratings, respectively. CommonSpirit also saw strong demand for its recent bond offering.
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About CommonSpirit Health
CommonSpirit Health is a nonprofit, Catholic health system dedicated to advancing health for all people. It was created in February 2019 by Catholic Health Initiatives and Dignity Health. With its national office in Chicago and a team of over 150,000 employees and 25,000 physicians and advanced practice clinicians, CommonSpirit operates 138 hospitals and more than 2,000 care sites across 21 states. In FY 2022, CommonSpirit had revenues of $33.9 billion and provided $4.9 billion in charity care, community benefit, and unreimbursed government programs. Learn more at www.commonspirit.org.
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