CommonSpirit Health Announces Second Quarter Financial Results

Feb. 17, 2021—CHICAGO—CommonSpirit Health today released financial results for the quarter ended Dec. 31, 2020. Even as it prioritized its response to a fall and winter surge in COVID-19 cases and prepared to distribute COVID-19 vaccines, CommonSpirit remained on a strong path to recovery from the financial impacts of the pandemic, posting a significant increase in operating revenue compared to the previous year’s quarter, as well as improved patient volumes and expense management across the organization.

Several key performance metrics showed improvement. CommonSpirit’s revenues for the quarter rose to $8.28 billion, up 7.5% compared to the previous year’s quarter, when the prior year is normalized to include three months of California provider fee revenues. The health system recorded operating income of $363 million, compared to $161 million in the previous year’s quarter. EBITDA was $837 million, a 10.1% margin for CommonSpirit, one of the nation’s largest nonprofit health systems.

The pandemic continues to have a significant impact on CommonSpirit’s performance, and adjusted admissions remained approximately 9% lower than the previous year’s quarter. Federal aid also remains vital for CommonSpirit’s 140 hospitals. Excluding CARES Act grants, revenues totaled approximately $8 billion, operating income was $70 million (a 0.9% margin), and EBITDA was $544 (a 6.8% margin). CommonSpirit is showing consistent improvement compared to earlier in the pandemic, and revenues, EBITDA and volumes have improved each quarter since the pandemic began even when federal grants are excluded.

CommonSpirit’s top priority continues to be responding to the pandemic. As of Dec. 31, CommonSpirit care sites had cared for more than 144,000 COVID-19 positive patients, and a number of CommonSpirit facilities took steps to expand staffing and capacity in response to the fall and winter surge in cases. The organization’s employees and clinicians continue to show remarkable dedication and resilience even as demands remain intense. CommonSpirit care sites began distributing vaccines in December and the company recently reported that 80% of its 150,000 employees and clinicians have been vaccinated or plan to be vaccinated.

The organization is effectively managing expenses but continues to incur costs related to ensuring appropriate staffing and capacity, expanding testing capabilities, and procuring freezers and other equipment as well as developing new digital platforms for distributing COVID-19 vaccines. CommonSpirit is now devoting significant resources toward vaccinating its employees, patients, and community members through its hundreds of care sites and a number of large-scale community events. Although COVID-19 cases are now declining, CommonSpirit expects the pandemic to continue to impact operations for the foreseeable future, and volumes may remain below pre-pandemic levels for some time.
“The last year has been challenging for our organization, but we are incredibly proud of the way our employees and facility leaders have stepped up to meet the health needs of our patients,” said CommonSpirit Chief Financial Officer Dan Morissette. “Now, COVID-19 vaccines and a decline in cases are bringing new hope, and we are similarly seeing improvement with our organization’s performance. Clearly there are still challenges for us ahead, but our coordinated and effective response to the pandemic means we are well-positioned to sustain our operations and thrive in the post-pandemic health care landscape.”

Despite the pandemic’s headwinds, CommonSpirit remains focused on growth opportunities to expand access to health care and advance health equity in its communities. CommonSpirit recently completed a combination with the Virginia Mason system to create Virginia Mason Franciscan Health in Washington; announced a new 10-year, $100 million partnership with the Morehouse School of Medicine to expand the pipeline of diverse clinicians across the country; completed an affiliation with Yavapai Regional Medical Center in Arizona; and joined with 13 other leading health systems to create a new company, Truveta, that will harness the power of shared data to facilitate clinical insights. CommonSpirit also continues to invest in virtual care capabilities as part of its long-term strategy, and, as of Dec. 31, had completed more than 1.1 million virtual visits, underscoring its role as one of the country’s leading virtual care providers.

The health system also recently announced a letter of intent with Essentia Health for Essentia to assume ownership of CommonSpirit’s 14 hospitals and other care sites in North Dakota and Minnesota. An agreement would help ensure the long-term viability of those facilities, while allowing CommonSpirit to focus on markets where it can establish a continuum of pre-acute, acute, post-acute, preventive and specialty services.

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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 approximately 150,000 employees and 25,000 physicians and advanced practice clinicians, CommonSpirit operates 140 hospitals and more than 1,000 care sites across 21 states. In FY 2020, CommonSpirit had revenues of $29.6 billion and provided $4.6 billion in charity care, community benefit, and unreimbursed government programs. Learn more at www.commonspirit.org.