CommonSpirit Reports Operating Loss in Q3, Coronavirus 'Slowed Positive Trends'

The Chicago-based provider's revenues did inch up to just north of $7.3 billion.

CommonSpirit Health reported an operating loss of $387 million in Q3 2020 as the system dealt with the financial challenges related to the coronavirus disease 2019 (COVID-19) pandemic.

The Chicago-based provider released its latest earnings report Friday afternoon, which indicated that CommonSpirit's revenues did inch up to just north of $7.3 billion.

However, CommonSpirit faced a serious obstacle related to the cancellation of elective surgeries and procedures due to the outbreak, which contributed to a peak of 40% patient volume declines by mid-April.

Additionally, the system reported significant costs to "secure additional supplies and personal protective equipment, increase capacity, and retain enough staff for potential COVID-19 volume surges."

In an interview with HealthLeaders, CommonSpirit CFO Dan Morissette, MBA, said that the system has already seen some recovery in its patient volumes as most of its markets have reopened for procedures that were canceled over the past two months.

Morissette added that CommonSpirit is looking to "responsibly" reopen with safeguards in place, following an approach that is consistent with state approvals. Despite the interruption to the system's care delivery process because of the crisis, Morissette said the system has seen its telehealth services grow considerably.

"One of the silver linings in a very, very dark cloud for humanity is telehealth; we have been conducting more than 40,000 telehealth visits with our consumers each week," Morissette said. "This is up exponentially from where it was before the pandemic happened. I point this out because we have sort of been pressed into doing some of the transformations around telehealth, home health, and increased advocacy at the Medicaid standpoint. These [transformations] are consistent with our push towards value-based care and community health."

Anticipating a potential second or third wave of the coronavirus in the coming months, Morissette said that CommonSpirit is examining how it handled the first wave of the pandemic and modifying its approach to serve on the frontlines for communities across the country.

"The short answer is that when you look at where we were the first time when the pandemic hit, we started shutting down," Morissette said. "Now, if you look at the second or third wave, we see it more like a dimmer switch. As our regional markets and local markets become more impacted by the continuation of this pandemic, we are prepared to dial back services there. Likewise, we are prepared to dial up services in areas that are not as impacted to try to serve the communities that we're in."

The system took swift action in the early days of the pandemic to address concerns around care access and affordability.

On March 18, CommonSpirit suspended billing for patients undergoing tests and treatments at its facilities nationwide.

CommonSprit stated that prior to the spread of the coronavirus across the country in mid-March, the organization had been seeing "positive trends" for the first two months of 2020.

The organization recorded a total net income of $579 million during Q2 2020 and saw its EBITDA reach $528 million, an increase of 7.1% compared to Q2 2019.

Editor's note: This story has been updated to include commentary from CFO Dan Morissette, MBA.

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.

Photo credit: Photo courtesy of CommonSpirit Health