After a week-long delay, CommonSpirit produced its year-end financial statement Friday.
CommonSpirit Health produced its year-end pro-forma financial statement Friday, highlighted by a nearly $600 million operating loss.
The Chicago-based system, which formed earlier this year as a result of the megamerger between Dignity Health and Catholic Health Initiatives, achieved total operating revenues of $28.8 billion, down from $29.2 billion this time last year. CommonSpirit attributed the revenue decline in part to the California provider fee.
Meanwhile, the organization's operating expenses exceeded $29 billion, a nearly $400 million year-over-year increase.
For its bottom line, CommonSpirit reported an operating loss of $582 million, after posting a $244 million gain this time last year. The system also saw its nonoperating income drop from $966 million to $328 million.
The health system remains optimistic about its prospects going forward, as CommonSpirit is planning to embark on a $2 billion performance improvement plan that will bolster its EBITDA by 8% within the next four years.
Dan Morissette, MBA, chief financial officer at CommonSpirit, told HealthLeaders that path to improved EBITDA comes from a strong operating model and providing additional care options across the continuum. He added that such improvements rely on revenue growth as well as cost savings.
"On the cost side, that includes renegotiating contracts and being more efficient in the patient care arena," Morissette said. "Those kinds of things can make the average cost of care go down and improve profitability."
In a press release, the organization highlighted its stable admission metrics, with outpatient visits increasing 1.5% while adjusted admissions dropped slightly by 0.1%.
Notably, the percentage of outpatient services as part of net patient revenues fell by 4%, while overall net patient revenues grew by more than $5.3 billion.
Morissette said those metrics from fiscal year 2019 were likely an 'outlier,' saying that CommonSpirit is continuing to see larger growth in outpatient services.
CommonSpirit also made two major moves in August: completing a $6.4 billion bond offering and announcing the sale of KentuckyOne facilities to the University of Louisville Health.
One lingering challenge to the organization's financial performance remains charity care, as CommonSpirit provided nearly $4.5 billion worth of unpaid care during fiscal year 2019.
As the megamerger was under regulatory review last fall, the state of California added conditions for its approval.
The charity care conditions require CommonSpirit to provide 100% discounts to families that earn up to two-and-a-half times the federal poverty level.
Editor's note: This story has been updated to include MBA as part of Dan Morissette's title and Chicago as CommonSpirit' Health's headquarters.
Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.
Photo credit: Chicago: Panoramic view of Chicago city with Cloud Gate Sculpture in downtown and in foreground. (Editorial credit: Aberu.Go / Shutterstock.com)