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Financial Results for Second Quarter FY 24

CommonSpirit Health released financial results for its fiscal year 2024 second quarter ended Dec. 31, 2023.

(CHICAGO) – Feb. 15, 2024 – CommonSpirit Health released financial results for its fiscal year 2024 second quarter ended Dec. 31, 2023. The results show improvement on a year-to-date basis versus prior year, driven in large part by higher volume levels, reductions in length-of-stay and other efficiency initiatives. Momentum on earnings improvement is offset by the continued impact of salary and supply cost inflation increasing at a higher rate than payor reimbursement rates, as well as the accelerating rate of denials from some payers.

CommonSpirit reported operating revenues of $9.35 billion and operating expenses of $9.44 billion for the quarter ended Dec 31, 2023, compared to revenues of $8.19 billion and expenses of $8.63 billion for the same period last year, all normalized for the California provider fee program. The health system recorded an operating loss of $87 million and EBITDA of $484 million, an operating  margin of -0.9% and an EBITDA margin of 5.2%, again normalized for the California provider fee, compared to an EBITDA margin of 0.6% for the same period in the prior year. 

On a same-store basis, volumes increased in the quarter, with adjusted admissions rising 6.9% and outpatient visits increasing 3.3%, compared to the same period in the prior year. The average length of stay decreased from 4.98 days to 4.77 days in the same period in the prior year as a result of continued efforts to manage the continuum of care. 

In the second quarter, management continued to work with various health plans to reduce prior authorization denials and speed reimbursement for services provided to patients, further expanded our ambulatory footprint, enhanced our workforce retention programs, and identified programs that would drive essentiality in the communities in which we provide care.  We expect the results of all of these efforts to yield benefit to the organization beyond this fiscal year.

“We are gratified to see our collective hard work result in improved financial performance this fiscal year, though we appreciate there is still more to do,” said CommonSpirit’s Chief Financial Officer Dan Morissette. “As a result, we remain focused on further improving our financial performance by exploring growth opportunities, sound investment strategy and cost containment. We are also taking steps to reverse some of the financial trends which have been exacerbated by both inflationary pressures and payers' continued unwillingness to be better partners. And, as always, we are making these adjustments while ensuring that we provide the care and services that are essential to the communities we serve.”

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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 the merger of 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 142 hospitals and more than 2,250 care sites across 24 states. In FY 2023, when normalized for the California provider fee program, CommonSpirit reported revenues of $34.6 billion and provided $5 billion in charity care, community benefit, and unreimbursed government programs.