CommonSpirit Health's latest earnings report was a mixed bag, but ultimately the system was left with a large operating loss.
CommonSpirit recently released its fiscal year 2024 first-quarter results, which ended September 30, where gains were largely offset by costs.
The health system experienced robust volume growth, reflected in increased adjusted admissions and outpatient and ED visits, the report showed. However, these gains were offset by rising costs, particularly elevated labor costs and inflation rates surpassing payer reimbursement rates.
The financials, with operating revenues at $8.87 billion and operating expenses at $9.16 billion, resulted in an operating loss of $291 million and EBITDA of $237 million, with margins of -3.3% and 2.7%, respectively.
Despite these challenges, the health system remains proactive, implementing initiatives to enhance efficiency and financial stability in supply chain, pharmacy, payer contracting, and purchased services, the report said.
The commitment to market-based growth strategies, including the development of ambulatory offerings and integrated delivery networks, underscores CommonSpirit's resilience amid industry headwinds.
But will it be enough for CommonSpirit to see some black next quarter?
Time will tell, but between consistent losses and layoffs, the system may need to fight its poor margins for a bit longer. In fact, CommonSpirit reported a $1.4 billion operating loss and a $259 million net loss for its 2023 fiscal year, which ended June 30.
Amanda Norris is the Associate Content Manager of Finance, Payer, Revenue Cycle, and Strategy for HealthLeaders.
CommonSpirit continued to see an operating loss.
Why? High labor expenses and inflation rates, the system says.