CommonSpirit Health reported an operating loss in the three-months ended March 31, but strong investment gains boosted the health system's bottom line, according to unaudited financial documents.
Chicago-based CommonSpirit was formed through the Feb. 1 merger of San Francisco-based Dignity Health and Englewood, Colo.-based Catholic Health Initiatives. Since the quarter that ended March 31 was the health system's debut quarter, some financial and operating results were presented on a pro forma basis, using accounting records of CHI and Dignity Health as if they had been combined for the full quarter.
CommonSpirit reported revenue of $7.26 billion in the third quarter of its fiscal year 2019, which ended March 31. That's down from revenue of $7.32 billion in the third quarter of fiscal year 2018.
The health system said net patient and premium revenues climbed 1.3 percent year over year. Implicit price concessions and no longer consolidating with U.S. HealthWorks offset those gains, the health system said. In February 2018, Dignity closed a deal with Mechanicsburg, Pa.-based Select Medical to combine occupational medicine and urgent care businesses. Under the transaction, Select Medical's Concentra Group Holdings and Dignity's U.S. HealthWorks combined.
After factoring in a 2.6 percent year-over-year increase in operating expenses, CommonSpirit posted an operating loss of $100 million in the third quarter of fiscal 2019. That's compared to operating income of $144 million in the same period a year earlier.
CommonSpirit ended the third quarter of fiscal 2019 with net income of $500 million, up from $213 million in the same period of the year prior. The increase was primarily attributable to investment income, which climbed from $64 million in the third quarter of fiscal 2018 to $666 million in the third quarter of fiscal 2019.
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