CommonSpirit Health, a 142-hospital system based in Chicago, reported a loss for the 12 months ended June 30, according to financial documents released Sept. 23.
CommonSpirit, formed through the 2019 merger of San Francisco-based Dignity Health and Englewood, Colo.-based Catholic Health Initiatives, saw revenues increase 2 percent year over year to $33.9 billion in the most recent fiscal year.
The health system's expenses hit $35.2 billion in the year ended June 30, up 9 percent year over year. Expenses tied to salaries and benefits increased from $16 billion in fiscal year 2021 to $18.2 billion in the most recent fiscal year. CommonSpirit attributed the increase to several factors, including contract labor costs, premium pay and retention programs.
CommonSpirit recorded an operating loss of $1.3 billion in the 12-month period ended June 30, compared to an operating income of $998 million a year earlier.
"This continues to be a very challenging time for health systems, especially nonprofit health systems like CommonSpirit where a majority of patients are Medicare and Medicaid beneficiaries," CommonSpirit CFO Dan Morissette said in an earnings release. "As an integrated organization with a broad footprint, we've been able to take many steps to reduce costs and grow revenue. But it's clear we need to do more to improve performance. We will remain focused on growth in the new health care landscape, finding additional cost savings, and lowering contract labor costs while reducing turnover and improving retention by doing even more to support our teams."
CommonSpirit recorded investment losses of $971 million during the year ended June 30 and closed out the fiscal year with a net loss of $1.8 billion. In fiscal year 2021, the health system reported net income of $5.2 billion, which included investment income of $3.4 billion.
CommonSpirit is facing many of the same financial pressures as other health systems across the U.S. More than half of hospitals — 53 percent — are projected to have negative margins for the rest of the year.