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Declining Revenue and Rising Costs Impact CommonSpirit Health’s Q3 Earnings

 |  By Amanda Schiavo  
   May 15, 2023

The organization says it is prioritizing reducing expenses and volume growth.

CommonSpirit Health, a Chicago-based nonprofit provider with 143 hospitals and approximately 2,300 care sites across 22 states, reported its 2023 third-quarter earnings results, which highlighted how rising expenses and a decline in revenue continue to plague the system.

CommonSpirit reported operating revenues of $8.57 billion and operating expenses of $9.08 billion for the quarter, compared to $8.52 billion of revenues and $8.98 billion of expenses for the same quarter in 2022. The provider posted a normalized operating loss of $508 million and EBITDA of -$38 million, a -5.9% and -0.5% margin, respectively. CommonSpirit says it continues to see strong volume growth, with adjusted admissions on a same-store basis rising 9% compared to the prior year’s quarter. Same-store outpatient visits increased 4.7% and ED visits rose 5.1%.

CommonSpirit says a decline in patient acuity and reimbursement that has not kept up with inflation impacted its financial results for the 2023 third quarter. Rising expenses, labor shortages, and the impact of a cyber security issue from late 2022 also played a role in the organization's latest financial results.

"CommonSpirit is delivering high-quality services all along the care continuum to communities across the country. These results show that patients and consumers are continuing to seek care through a broad range of access points," CommonSpirit CFO Dan Morissette, said in the earnings release. "Now we’re taking decisive steps to boost revenue and address our costs to ensure we’re operating in a sustainable way for years to come."

Amanda Schiavo is the Finance Editor for HealthLeaders.

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