CommonSpirit Health, which operates 142 hospitals in 21 states, saw revenues and patient volume increase in the first quarter of fiscal year 2020 but ended the three-month period with an operating loss.
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 merger occurred less than a year ago, financial and operating results for the first quarter of fiscal 2019 were presented on a pro forma basis, using accounting records of CHI and Dignity Health.
In the first quarter of fiscal 2020, which ended Sept. 30, CommonSpirit reported operating revenues of $7.2 billion, up from $7.1 billion in the same period a year earlier. Net patient service revenue and premium revenue increased year over year.
Compared to the first quarter of fiscal 2019, adjusted admissions and adjusted patient days were up 2.3 percent and 2.2 percent, respectively, in the most recent quarter.
"We are encouraged by the growth of revenue and volumes as we expand our services, and we remain focused on achieving significant savings and growth as we build our organization in this challenging environment for health care," Daniel Morissette, CommonSpirit's senior executive vice president and CFO, said in an earnings release.
After factoring in a year-over year increase in operating expenses, CommonSpirit posted an operating loss of $227 million in the first quarter of fiscal 2020, compared to an operating loss of $56 million in the same period a year earlier.
"The operating loss for the quarter ending in September can be attributed in part to a delay in CMS approval for the new cycle of the California Provider Fee program," the system said in an earnings release. When including expected California provider fee income, the operating deficit for the most recent quarter would be $119 million, the health system said.
CommonSpirit's EBITDA declined nearly 41 percent year over year to $246 million in the first quarter of 2020. The health system estimates its EBITDA would have been $354 million if it had received the provider fee revenue.
"We know we have work to do to improve our operations, and we're pleased with our progress given the complexities of brining together two established health systems into a new, national health ministry," Mr. Morissette said.
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