CommonSpirit Health operated in the black in the quarter ended Sept. 30, thanks entirely to COVID-19 relief grants from the federal government.
The 139-hospital Chicago-based system posted $167 million in operating income in the first quarter of its fiscal 2021 on $7.7 billion in revenue, a 2.2% margin. The gain was comprised of federal coronavirus relief grants, without which CommonSpirit would have lost $25 million in the quarter.
Even without the grants, though, the health system still performed far better than the comparable 2019 period, when it lost $106 million $7.4 billion in revenue—including California provider fee revenues—a -1.4% margin.
Despite the pandemic's headwinds, CommonSpirit has made huge strides with respect to boosting its financial and operational performance, Chief Financial Officer Dan Morissette said in a statement.
"While we will undoubtedly continue to face challenges in the months ahead, we have taken meaningful steps to improve our performance, manage our expenses, and meet the health needs of our patients and communities across the country," he said.
Not-for-profit CommonSpirit has struggled to make money since the February 2019 merger to form the massive health system. Its first operating gain didn't come until the second quarter of fiscal 2020.
Then it again reported a loss in the following quarter as patient volumes plummeted during the pandemic.
CommonSpirit said it has treated more than 37,000 COVID patients system-wide since the onset of the pandemic through Sept. 30. Nearly 625 COVID patients were being treated in CommonSpirit facilities as of Sept. 30, or 7% of total inpatient cases.
CommonSpirit said after losing about 40% of its normal volume in April, visits rebounded in May and June. Acute admissions were down 7.4% year-over-year in the quarter ended Sept. 30, and outpatient visits fell 5.9% in that time. Emergency department visits, which have been the slowest to return, were down 19% year-over-year.
CommonSpirit's expenses grew 2% in the quarter year-over-year to $7.6 billion.
CommonSpirit said it had received about $1.3 billion in federal relief grants as of Sept. 30, money that does not have to be repaid. Of that, $192 million was recorded in the quarter ended Sept. 30 and $826 million was recorded during the quarter ended June 30. The health system said it also received $2.6 billion in accelerated Medicare payments.
CommonSpirit said it also plans to defer about $380 million in employer payroll taxes to December 2021 and 2022. The system had already deferred $234 million in payroll taxes through Sept. 30.
In total, CommonSpirit said the accelerated Medicare payments and payroll tax deferral added 37 days cash on hand as of Sept. 30.
