CommonSpirit Health was hit hard in the beginning of the calendar year, reporting $591 million in operating losses for the quarter ended March 31, 2022, compared to a gain of $539 million during the period a year prior.
The faith-based nonprofit also reported a quarterly EBITDA loss of $110 million, a harsh turnaround from the more than $1 billion profit of early 2021.
Total operating revenues for the most recent quarter landed at nearly $8.3 billion, down year over year from over $8.8 billion.
However, CommonSpirit wrote in its report that no provider fee net income was reported for the quarter, as the Centers for Medicare & Medicaid Services is yet to approve California’s provider fee program for the 2022 calendar year.
As a result, the system also reported adjusted financials normalizing program fees and expenses. These included an adjusted quarterly operating loss of $462 million, adjusted quarterly EBITDA of $19 million and adjusted quarterly total operating revenues of $8.5 billion—all of which still represent a year-over-year decline for the nonprofit.
While total operating revenue was down year over year, Commonspirit did see returning volumes, new affiliations and a stable payer mix bolster its net patient and premium revenues during the quarter. Of note, same-store adjusted admissions were up 3.7% over the previous year’s quarter while emergency department visits grew 15.1%.
These gains were, however, paired with about $550 million in additional operating expenses, the system wrote. Salaries and benefits grew 12.2% year over year while supplies and purchased services, respectively, grew 4.2% and 6.9%. CommonSpirit also cited inflationary pressures and COVID-19 patients’ longer lengths of stay as contributors to its increased spending.
Outside of operations, CommonSpirit reported a net loss of $183 million from its investments from January to March. Alongside other sources, it tallied a total nonoperating income loss of $17 million for the quarter, well below the nearly $1.2 billion of the prior year’s period.
The end of the most recent quarter represents the nine-month mark for CommonSpirit’s fiscal year.
For the cumulative fiscal year to date, the system reported a $638 million operating loss (down from 2021’s nine-month operating income of almost $1.1 billion), $834 million EBITDA (down from $2.5 billion), $25.7 billion in total operating revenues (up from $24.8 billion), total operating expenses of $26.3 (up from $23.8 billion) and nonoperating income of $469 million (down from $3.5 billion).
Formed in 2019 from the merger of Catholic Health Initiatives and Dignity Health, CommonSpirit Health currently operates 140 hospitals and more than 1,500 care sites across 21 states. It logged $33.3 billion in revenues during fiscal year 2021 and recently announced Henry Ford Health’s Wright Lassiter as the incoming CEO prior to current CEO Lloyd Dean’s Aug. 1 retirement.
Last month, CommonSpirit also announced that it would be selling off its 50% ownership stake in MercyOne to Trinity Health for an undisclosed sum.
The Catholic health giant’s rough quarter looks to be the norm as health systems fended off COVID surge costs with little support from their investments. Kaiser Permanente and Ascension Health, for instance, shouldered respective net losses of $961 million and $884 million for the period ending March 31.