CommonSpirit Health hauled in $539 million in operating income in the third quarter of its 2021 fiscal year, a turnaround from the $145 million loss it reported during the same time last year.
The Chicago-based Catholic health system’s latest financial report also showed nine-month earnings of nearly $1.1 billion for the period ending March 31, again rebounding from the previous year’s loss of $332 million during the same period. It will complete its full fiscal year June 30.
The nonprofit system reported $8.8 billion in total operating revenues for the quarter and $24.8 billion for the nine-month period.
Here, quarterly net patient and premium revenues rose 2.6% to nearly $7.7 billion for the quarter and 4.3% to $22.3 billion for the nine-month window. Much like its last report in February, the health system attributed those gains to a stable payer mix and higher acuity while noting a persistent—but less impactful—drop-off in volume tied to the COVID-19 pandemic.
CommonSpirit also reported roughly $1.2 billion and $2.5 billion in other operating revenues for the two periods, of which $133 million and $617 million came from CARES Act support, respectively.
To date, the system said it has received about $1.5 billion under the CARES Act and $2.8 billion under the Medicare Accelerated and Advance Payment Program. It also deferred $416 million in employer payroll taxes via the Paycheck Protection Program and Health Care Enhancement Act.
Expenses have been on the rise for CommonSpirit over the past year, hitting $8.3 billion for the quarter and almost $23.8 billion for the fiscal year so far.
The largest proportional bump in expenses was felt among salaries and benefits, which were up 10.6% and 5.9% for the respective quarter and nine-month period. Supply costs saw 8.7% and 8.1% increases of their own during the two windows, which the system attributed to COVID-19 preparations, high-acuity patient supplies and general inflation.
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Taken together, the system posted a net income just over $1.7 billion for the quarter.
As of March 31, CommonSpirit was sitting on $20.1 billion in cash ($3.9 billion) and other unrestricted investments, a sizable jump over the nearly $15.8 billion it was holding at the top of its fiscal year.
Per the report, the liquidity increase is a result of “strong investment returns, the sale of joint ventures shares, CARES Act revenue, the consolidation of the CommonSpirit Operating Investment Pool, LLC, [Yavapai Regional Medical Center] and [Virginia Mason Health System], and favorable operating results, partially offset by financing activities.”
COVID-19 inpatient volumes have simmered down since the system’s early January peak of nearly 3,700 patients. That number landed at 602 patients as of the end of March and maintained that level through April.
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The system wrote that its strategy to weather the pandemic’s impact on its business has leaned on the adoption of a virtual infrastructure, revenue diversification and expense and liquidity management.
“CommonSpirit enters the next phase of the pandemic with confidence stemming from considerable experience and expertise,” the system wrote in the report. “Vaccination coverage continues to increase and COVID-19 cases continue to decline, but cases are not expected to cease altogether. A low, but steady, number of COVID-19 patients are anticipated for the long term.”
CommonSpirit runs more than 1,000 care sites across 21 states, 140 of which are hospitals. It staffs roughly 149,000 employees and more than 25,000 physicians.