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November 15, 2022 05:07 PM

CommonSpirit reports rough start to fiscal year with $400M loss

Caroline Hudson
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    CommonSpirit Health is the latest nonprofit system hit with ongoing financial ramifications from inflation and labor shortages.

    The Chicago-based health system on Tuesday reported a net loss of $397 million for its fiscal year 2023 first quarter, compared with a $269 million gain a year ago. Operating revenue came to $9.01 billion in the quarter, a 5.4% year-over-year increase. Operating expenses rose 5.6% to $8.99 billion. These results are not normalized for income related to the California Provider Fee program, a policy designed to support hospitals treating Medicaid enrollees and uninsured patients.

    Expenses for salaries and benefits rose 5.1% from a year ago, and contract labor, overtime and premium pay contributed to the quarter’s increase. However, the system said it has seen a 43% reduction in contract labor costs since March. Supply costs dipped by 4.6%, while purchased services expenses increased by 13.4%. 

    CommonSpirit also weathered a $517 million net loss on investments in the quarter. 

    On Sept. 1, Trinity Health in Michigan acquired full ownership of $613 million of Iowa-based MercyOne, a health system jointly owned with CommonSpirit. The system reported a $34 million net loss on that sale in September.

    In October, CommonSpirit issued two bonds to raise about $1.5 billion to refinance prior debt, reimburse prior capital expenditures and fund general corporate purposes. Lisa Zuckerman, senior vice president of treasury and strategic investments, said at that time the system's strategy is to enter the bond market every one to three years.

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    • News
      • Current News
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      • Transformation
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      • ESG
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      • Regional News
        • Midwest
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      • Digital Edition (Web Version)
    • Blogs
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      • From the Editor
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        • Nominate/Eligibility
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        • Best Places to Work in Healthcare
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        • Healthcare Marketing Impact Awards
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        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
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        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - AI and Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
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