At 2024’s J.P. Morgan Healthcare Conference, leaders at CommonSpirit Health told attendees about a newly launched “One CommonSpirit” initiative seeking to unify programs, platforms, systems and strategic goals across the massive nonprofit health system.
The $37 billion CommonSpirit formed in 2019 through the merger of Dignity Health and Catholic Health Initiatives, and, right off the bat, it set a target of $2 billion in resulting synergies. It reached that initial goal in 2023—slightly delayed by pandemic hurdles—and has since turned its focus toward further integrations and national-scale programs that will make those efficiency gains more sustainable.
“We’re now at a place where we can say that we’re beginning to see the fruits of that labor,” CEO Wright Lassiter III, who joined midway through 2022, told conference attendees Tuesday morning.
Take CommonSpirit’s technology platforms, for example. At one point, the organization had more electronic health record versions than “I have fingers on both hands, and we had more versions of ambulatory EHRs than I have fingers on my hands and toes on my feet—and [Chief Financial Officer Daniel Morissette] has on his body,” Lassiter joked with the crowd.
CommonSpirit is now moving toward a single enterprise resource planning platform as well as other national programs like a nursing residency program, a virtually integrated care model, patient connection centers, virtual patient monitoring centers and a digital consumer experience platform—all systemwide efforts “that previously either didn’t exist or existed in buckets [and] pockets across the ministry,” Lassiter said.
The focus on “systemness” can help drive improvements in care delivery and financial performance alike, the CEO continued. From 2023 to 2024, quality and safety metrics across the system have improved anywhere from five percentile points to 35 percentile points as its Net Promoter Score has hit 68 points. Meanwhile, revenue grew by $2.8 billion or 8.2%, adjusted admissions rose 6.6%, and EBITDA rose from 2.2% to 3.5%.
“Our results for first quarter of fiscal [2025] were quite impressive, year-over-year growth, and we haven’t reported our fiscal Q2 results as of yet … I’ll just say that they’re even better than Q1, and so the good news is we’re seeing quarter-over-quarter, year-over-year improvement.”
CommonSpirit posted operating losses of $875 million across fiscal 2024, a roughly $400 million increase over the prior fiscal year, and a $503 million net gain.
As CommonSpirit works to unify its operations, it still needs to be mindful of individual markets’ strategic needs and the broader headwinds affecting health systems. Lassiter said the organization has realigned its structure and now views itself as a 35-market enterprise, and within those organized into 23 management markets.
“Each market is different,” the CEO said. “We have markets that are in California that are almost the majority capitation, we have markets that have never heard the word capitation before, right? We have unions, we have places without unions. … The trick for us, from a national standpoint, is to roll those up in a sensible way and to spread the good work that’s done in one market to other markets so that we’re not all 35 autonomous markets doing whatever it is they want to do.”
Portfolio realignment is also being addressed at both the local and national levels, Lassiter added. Recent plans to divest from the San Francisco area came about “not because we weren’t committed to the community, but because we felt that we weren’t the best health system to deliver the services that were there.”
Elsewhere, CommonSpirit is launching partnerships to help address local needs, such as a 2023-24 deal with Lifepoint focused on behavioral care it is seeking to expand and another in Colorado with Kaiser Permanente’s practitioners. More broadly, the system has opened dozens of new ambulatory sites in the past year as it seeks to flesh out its portfolio beyond low-margin acute care.
“We will always be in the hospital business, but we also know that if we're only in the hospital business, we won't be financially sustainable given what we're trying to accomplish,” the executive said. “… I think most of us who operate in the provider space know that most of the ambulatory things we do deliver a greater margin than the acute care services to provide, especially if you operate in states where commercial reimbursement is small, low, constrained—whatever adjective you want to use. … So we’re going to invest fully in the care continuum [and] will continue to invest even more in ambulatory services.”