CHICAGO – Sept. 17, 2021 — CommonSpirit Health released financial results today for the fiscal year ended June 30, 2021. CommonSpirit demonstrated improved operating performance compared to prior years, showing the ability to manage through the COVID-19 pandemic and a commitment to operating discipline. At the same time the system acknowledged that it is still focused on improving its performance and expects the pandemic will continue to create operational pressures in the coming year.
CommonSpirit recorded operating income of $998 million, a 3% margin, compared to an operating loss of $550 million in FY20. When excluding CARES Act revenue and a one-time sale of joint venture shares, CommonSpirit posted an operating loss of $215 million. Revenues rose 12.4% compared to FY20 primarily due to recovering patient volume and the addition of new care sites to the system, including Virginia Mason Health System in the Pacific Northwest and Yavapai Regional Medical Center in Arizona. Expenses rose 7.1%, as significant pandemic-related expenses were partly offset with CommonSpirit’s continued commitment to managing its costs, including realizing more than $400 million in cost reductions in the fiscal year. CommonSpirit’s balance sheet was bolstered by $3.4 billion in investment income due to recovering financial markets compared to the prior year.
“These results show that we are navigating the pandemic in a purpose-driven, financially responsible way that has allowed us to prioritize providing essential care and supporting our clinicians and employees,” said CommonSpirit CFO Dan Morissette. “Being financially sustainable means we can deliver on our mission of providing care to everyone, especially those in need. As CommonSpirit enters its third full fiscal year, we are in a much better position to navigate health care’s ‘new normal’ compared to prior years.”
Financial stability allowed CommonSpirit to prioritize patient care throughout the pandemic across its 140 hospitals and more than 1,500 care sites, with a particular emphasis on caring for underserved communities. Since the start of the pandemic CommonSpirit has seen more than 234,000 COVID-19 patients and provided almost 1.6 million vaccinations, including organizing dozens of events focused on vaccinating low-income individuals, farmworkers, those living in rural areas and others without ready access to care. CommonSpirit remains one of the country’s highest volume providers of care for patients covered by Medicaid and Medicare, and total community benefit including unpaid cost for Medicaid and Medicare patients rose to more than $5 billion.
CommonSpirit was also able to implement a broad range of programs to support the wellbeing of employees and clinicians and invest in new virtual care capabilities, additional supplies and staff, vaccine distribution infrastructure, and a dedicated national testing laboratory. The organization also announced a major commitment to help increase the number of diverse clinicians in the health care workforce.
CommonSpirit continues to manage its response to the pandemic by applying learnings from the past year. The surge in patients due to the Delta variant caused the COVID-19 patient census across the system to increase to 2,878 in early September, up from a low of 340 in June. This compares to the previous peak of 4,142 in early January. Amid the current surge the organization is placing a particular emphasis on caregiver resilience and staff retention, as nursing and staffing shortages continue to impact health systems across the country.
CommonSpirit saw patients begin to return for preventive and delayed care throughout the fiscal year, although the current surge has impacted that trend. Adjusted admissions on a same-store basis was 2.7% below the prior year, while outpatient visits rose 5.1% to more than 25 million visits. Despite several state and federal regulatory barriers, demand for virtual visits remains strong, even as in-office visits have rebounded. Virtual visits continue to account for about 13% of total visits.
In FY21, CommonSpirit recorded $690 million in provider relief funds revenue in support of its 140 hospitals through the CARES Act, which provides financial aid for hospitals and providers to respond to the pandemic. While these funds have been an essential revenue source, they do not fully cover pandemic-related losses.
Despite the pandemic the system was able to maintain a focus on growth and providing better value. FY21 results included Virginia Mason Franciscan Health, the combination of Virginia Mason and Franciscan Health in CommonSpirit’s Pacific Northwest division, as well as the addition of Yavapai Regional Medical Center to the system’s Southwest Division. CommonSpirit also expanded ambulatory surgical center relationships in several states during the fiscal year.
CommonSpirit remains one of the nation’s largest providers of value-based care, announcing last month that it had delivered improved quality and $136 million in savings to Medicare for the 2020 performance year of the Medicare Shared Savings Program. The organization also recently announced partnerships with Tia, a women’s-health startup, and Truveta, a collaboration of provider systems focused on harnessing the power of shared data.
CommonSpirit has made significant progress on the priorities it outlined when it was formed through the merger of CHI and Dignity Health in February 2019. As it enters FY22, the organization remains on target to achieve its cost-savings goals and previously completed a restructuring of its debt portfolio, as well as a realignment of its operating divisions into 7 regions, in addition to its joint operating companies in Colorado and Iowa. It has prioritized investments in home care and virtual care, and technologies to ease patient-provider interactions and facilitate referrals to social services that impact health. And it has retained an emphasis on caring for the underserved. CommonSpirit expects to release a new 5-year strategic roadmap in the fall.
About CommonSpirit Health
CommonSpirit Health is a nonprofit, Catholic health system dedicated to advancing health for all people. It was created in February 2019 by Catholic Health Initiatives and Dignity Health. With its national office in Chicago and a team of over 150,000 employees and 25,000 physicians and advanced practice clinicians, CommonSpirit operates 140 hospitals and more than 1,500 care sites across 21 states. In FY 2021, CommonSpirit had revenues of $33.3 billion and provided $5.1 billion in charity care, community benefit, and unreimbursed government programs. Learn more at www.commonspirit.org.