CommonSpirit Health has posted an operating revenue gain of $998 million and operating margin of 3% for the fiscal year ending June 30—a stark turnaround from the $550 million loss and negative 1.9% operating margin of the year prior.
That total includes $523 million tied to pretax gains from the sale of joint venture sales, the Catholic nonprofit noted in its annual filing, although excluding that sale still leaves the system with a $475 million operating gain.
Total operating revenues for the year landed at $33.3 billion, up from fiscal year 2020’s $29.6 billion.
Here, CommonSpirit Health enjoyed a 10.3% increase in net patient and premium revenues, which the system said was primarily bolstered by higher acuity, new hospital affiliations and a stable payer mix. Lingering volume shortfalls did partially offset those gains, the system wrote.
Operating expenses also increased year over year, albeit not to the same extent—$30.1 billion in 2020 to $32.3 billion in 2021 for a 9.2% increase. These were largely driven by a 9.7% bump in salary and benefits expenses and a 12.6% increase in supply spending.
The Chicago-based system also did quite well by its investment portfolio, notching a net investment income of $3.4 billion for the year. This greatly outpaced fiscal year 2020's $273 million and was credited to the year’s strong financial markets.
CommonSpirit’s earnings report outlined a steady quarterly increase in earnings and revenue during the first nine months of the year, which it largely attributed to pandemic trends. The upward momentum did slow in the final three months of the fiscal year, however.
CommonSpirit said it has received roughly $1.5 billion in CARES Act relief funding to date, $690 million of which was recorded in fiscal year 2021.
It has also received a total of $2.8 billion from the Medicare Accelerated and Advance Payment Program, about $200 million of which came in fiscal year 2021. The health system said $265 million of this was recouped during the quarter ending June 30, 2021, and CommonSpirit said it expects to see an average of $110 million recouped through future Medicare claims withholding per month.
CommonSpirit Health is the country's largest nonprofit health system with more than 1,000 care sites and 140 hospitals spread across 21 states. The Catholic system is also the largest provider of Medicaid services.
Turning to the present, CommonSpirit’s management wrote in the filing that it had reached nearly 2,900 COVID-19 inpatients across its hospitals by early September, more than an eightfold increase over the summer’s low point. Despite this uptick, the system said it has bolstered its supply of face masks and does not expect ventilator availability to become an issue now that its teams have developed stronger treatment protocols for the novel disease.
The system also said that it is continuing to see persistent demand for virtual health visits in 2021. From a high of more than 37% of all visits in April 2020, virtual care demand has stabilized to comprise roughly 13% of the system’s total visits during fiscal year 2021.
CommonSpirit’s numbers fit the broader turnaround of hospitals’ financials during late 2020 and the opening half of 2021.
Names like the Mayo Clinic and Advocate Aurora have signaled a widespread return of inpatient volumes with increased revenue and earnings, although others like Providence and Banner Health stressed the growing impact of staffing expenses on bottom lines. Recent industry reports have also suggested the delta variant’s surges could take a bite out of those recovery efforts among hospitals operating in hard-hit regions.