Chicago-based CommonSpirit recorded an operating loss of $165 million (-1.6% operating margin in the first quarter of fiscal 2026, compared to an operating loss of $331 million (-3.5% margin) during the same period last year, according to its Nov. 14 financial report.
Note: Figures are adjusted to normalize the California Provider Fee Program net income.
Five things to know:
1. CommonSpirit reported operating revenue of $10.3 billion for the three months ended Sept. 30, up from $9.4 billion during the same period last year. Operating expenses were $10.5 billion, up from $9.7 billion last year.
2. The system’s volumes on an adjusted admission basis increased 6% year over year. The acute average length of stay was 4.54 days, compared to 4.68 days during the same period last year. Outpatient visits increased 3.7% and ED visits decreased 1.9%.
3. Supply costs per adjusted admission grew more than 3% year over year. This was primarily due to higher surgical volume and continued inflationary impact on pharmaceuticals and surgical and medical supplies. CommonSpirit said it is working to reduce supply costs through renegotiation of supply chain contracts and vendor consolidations.
4. CommonSpirit said its primary challenges are broad inflationary pressures and reimbursement challenges. Challenges with payers on denials and timely payments continue to affect the system’s revenue. It is also challenged by payment increases from both government and non-government payers that do not keep pace with inflation.
5. Without adjusting for the California Provider Fee Program, CommonSpirit recorded a $396 million operating loss (-4% margin) in the quarter.
