Hospital system CommonSpirit Health reported operating revenue losses of $550 million during its fiscal year that ended in June, as the COVID-19 pandemic continues to roil patient volumes.
The 137-hospital system reported its financial earnings Friday for the 2020 fiscal year that ended June 30. CommonSpirit’s expenses also surged during the pandemic as more resources were needed to screen visitors and staff.
“Although it varies significantly by division, beginning the middle of March, the COVID-19 pandemic caused up to a 40% slowdown in volumes,” CommonSpirit’s financial report said. “As communities heeded guidelines to avoid hospitals for non-emergent issues, appointment volume, especially for specialty practices, fell and emergency department volume declined.”
CommonSpirit’s patient volumes did rebound after shelter-in-place orders started to be lifted in April and May, but the volumes are still below pre-pandemic levels.
At the end of the system’s fiscal year on June 30, the volumes on adjusted admissions were down 6.2% compared with the 2019 fiscal year.
Adjusted patient days for the fiscal year were also lower than the same period in 2019 by 5.7%.
At the same time, net patient and premium revenues declined by $239 million, or 0.9% over the same period in 2019.
“The decrease is primarily due to the impact of the COVID-19 pandemic and increased charity care, partially offset by a stable payor mix,” the earnings said.
Overall, CommonSpirit recorded an operating loss of $550 million for the 2020 fiscal year, which was an improvement on the $617 million in losses from 2019.
But those 2020 losses ballooned up to $1.4 billion when not taking into account money the system received from a $175 billion provider relief fund Congress set up as part of the CARES Act to help prop up hospitals and other providers.
The system also reported a $1.3 billion decline in earnings before interest, tax, depreciation and amortization and nonoperating income from March through June.
About 62% of the lost EBITDA has been recouped through the CARES Act funding, and another $500 million remains to be regained, CommonSpirit said.
Overall, CommonSpirit has recorded $826 million in money from the provider relief fund. It also got another $2.6 billion from the Medicare Accelerated and Advance Payment Program, which the system will have to repay.
The system anticipates it will defer $410 million in employer payroll taxes to December 2022, a flexibility also afforded under the CARES Act.
“While the aid received from the programs above provides much needed assistance during this crisis, CommonSpirit is unable to assess the extent to which the amounts and benefits received, or to be received, will offset the long-term changes in volumes, payor mix or service mix,” the report said.
The Department of Health and Human Services has more than $50 billion to still give out to hospitals, but some hospital groups say that more money is needed to combat the financial crisis caused by the pandemic. Talks on a new coronavirus relief deal have stalled in Congress.
While some larger for-profit systems such as HCA and Tenet have posted profits thanks to the provider relief funding, other not-for-profit systems such as Trinity Health and some smaller systems have reported struggles with overcoming the new financial crisis.