Chicago-based CommonSpirit, one of the largest nonprofit health systems in the country, will focus on five key areas to restore positive cash flow in the current fiscal year, CFO Dan Morissette told an investor call Feb. 23. The health system reported $451 million operating losses in the second half of 2022.
The five areas highlighted were as follows:
- Working to streamline labor costs, mainly focused on contract labor, but also to improve administration efficiencies. In addition, working with insurance companies to lower payments.
- A focus on non-labor cost savings.
- Near-term growth opportunities, which will rely significantly on a number of internal initiatives.
- Longer-term growth opportunities such as the recently agreed acquisition of Steward Health Care's sites in Utah.
- Working to reduce cycle times on revenues and expenses. There are a variety of opportunities to "clear any internal bottlenecks," Mr. Morrissette said.
In addition to these focus areas, other highlights of the call included claims discussions with insurers would likely result in a "significant portion" of the $150 million estimated losses from the October cyberattack to be recouped, Morissette said.
In terms of individual market performance, Colorado and Arizona were the best performers for CommonSpirit because of highly diversified services in an area where the system has a "pretty substantial geographic footprint," while the Pacific Northwest faced significant challenges mainly because of the higher inflationary pressures there, Mr. Morissette said.