In the recent earnings report for the second quarter of its fiscal 2020, CommonSpirit Health posted the first operating gain since it was created by a 2019 merger that combined Catholic Health Initiatives and Dignity Health. The Chicago-based health system reported $40 million in operating income on $7.5 billion in operating revenue for the quarter ended Dec. 31, a positive swing from the health system’s $87 million operating loss on $7.2 billion in revenue for the prior-year period. In June, Lloyd Dean will become the system’s only CEO after co-CEO Kevin Lofton retires. Dean said leading a 142-hospital not-for-profit system has been his riskiest move to date.
WHAT WAS YOUR RISKIEST MOVE? Creating CommonSpirit Health.
WHY WAS THAT RISKY? The scope of the merger was unprecedented. And with that scale comes outsized challenges and opportunities. Each organization had unique strengths and distinct care offerings. The challenge was bringing together our organizations to champion a new approach to healthcare that could work anywhere, an approach that is local, collaborative and customizable. We knew that we could take bold steps to build diverse care networks to serve urban, rural and suburban communities around the nation. Combining our health systems would also allow us to pivot our business model toward providing a continuum of healthcare services and taking on more risk.
WHAT WAS THE OUTCOME? We have seen great progress. We are already scaling a community health model that takes a more holistic approach to healthcare, prioritizes local partnerships, and emphasizes better outcomes and lower costs. We’ve seen quality improvements across the organization and grown our ability to take on risk, with 30% of our revenue now coming from value-based care. And we have improved our performance as we grow our services. We are increasing and diversifying our revenue and found hundreds of millions of dollars in savings. It will take time to fully realize our vision of a national healthcare system that is community focused while also leveraging the strengths of a national organization, but we are clearly on the right path.