When Wright Lassiter III took the helm of CommonSpirit Health in August 2022, the Catholic health system was losing hundreds of millions of dollars a quarter. At Ascension, Eduardo Conrado became president in February 2023 — during a fiscal year in which Ascension posted a $3 billion operating loss — and added the CEO title Jan. 1, 2026.
Both systems entered their respective turnarounds from positions of significant financial stress — products of pandemic labor costs, reimbursement shortfalls and, in CommonSpirit’s case, an unfinished merger integration that had stretched across a global health crisis. But the paths each chose, and the results each has produced, reveal different theories about what it takes to rescue a large, complex nonprofit health system at scale.
The depth of the hole
Chicago-based CommonSpirit was formed in 2019 through the merger of Dignity Health and Catholic Health Initiatives — two massive, geographically dispersed systems with distinct cultures, legacy infrastructure and financial profiles.
The integration was still incomplete when the pandemic arrived. By the end of fiscal year 2022 — the 12 months ending June 30, 2022 — the system reported a $1.3 billion operating loss, driven in large part by labor and supply inflation outpacing reimbursement at a system of CommonSpirit’s scale and complexity.
St. Louis-based Ascension’s decline was steeper and faster.
Post-pandemic labor costs spiraled across more than 130 wholly owned hospitals in nearly 20 states, a ransomware attack in May 2024 disrupted billing and revenue cycle operations for months, and a fragmented operating model stretched leadership capacity thin. By fiscal 2024, the system had recorded a $1.8 billion operating loss and Fitch Ratings revised its bond outlook to negative.
CommonSpirit’s bet: Transform the system, don’t dismantle it
CommonSpirit’s approach to its financial rebound has been, at its core, an operating model transformation: an effort to transform the system rather than substantially reduce its size, though it has sold hospitals in certain markets.
The 137-hospital system recently consolidated eight operating divisions into five regions (California, Central, South, Mountain and Northwest) and implemented various changes with an intentional focus on each geographic market.
In October 2025, the system unveiled Project Impact, a 36-month initiative targeting $5 billion to $6 billion in value creation across the organization.
“[There are still] sacred cows in the organization — corners that haven’t been touched like they need to be from an efficiency perspective,” Mr. Lassiter said during a fireside chat at Becker’s CEO+CFO Roundtable in November. “Nothing is off the table.”
Project Impact targets eight focus areas: digital and IT, business and clinical operations, the physician enterprise, growth, revenue optimization, capital position and human capital management.
Mr. Lassiter has been emphatic that the initiative is not a cost-cutting exercise dressed up in new language. “You can’t cut your way to success,” he said. The goal is to transform how the system delivers care, who delivers it and where — technology and care model redesign alongside operational efficiency.
The most consequential financial bet in the turnaround may be the revenue cycle. In February, CommonSpirit announced it would exit its longtime partnership with Conifer Health Solutions — the revenue cycle management company co-owned with Dallas-based Tenet Healthcare — and bring those operations fully in-house. The exit carries a steep near-term price: CommonSpirit will pay about $1.9 billion to Tenet over three years, with total exit costs estimated at $2.2 billion. The system reported a $3.4 billion net loss through the third quarter of fiscal 2026, including $2.5 billion in special charges tied to the Conifer departure.
CFO Michael Browning — who joined from Columbus-based OhioHealth in January — made the case plainly in a May statement: the system’s cost to collect is roughly double the industry average. Insourcing is expected to close that gap substantially and, as a secondary benefit, accelerate CommonSpirit’s Epic implementation timeline by what Mr. Browning said could be “a few years.” The implication is that the third-quarter losses, painful as they appear in a headline, are the cost of building a more durable financial engine.
Hospital divestitures have been part of the strategy, but on a more selective basis than Ascension’s approach. CommonSpirit recently sold hospitals in California and Iowa, and sold or is actively exploring the sale of seven more hospitals in North Dakota and Ohio — shedding assets at the edges of its footprint rather than restructuring the core. The system sold CHI St. Alexius Health Devils Lake in North Dakota to Altru Health System in March and is in talks to sell an additional three North Dakota hospitals to Altru and three Ohio hospitals to UPMC.
The financial picture through the first nine months of fiscal year 2026 is mixed. Before special charges, CommonSpirit reported a $1.2 billion operating loss at a -4% margin — a deterioration from -1.5% in the prior-year period, largely reflecting Conifer transition costs. Operational indicators are more encouraging: adjusted admissions grew 4.3% year over year, and average acute length of stay improved to 4.62 days from 4.74. The system held $17.2 billion in unrestricted cash and investments, equivalent to 154 days cash on hand.
Ascension’s bet: Shrink first, grow second
Where CommonSpirit has largely chosen to optimize itself at scale, Ascension made a different calculation: the fastest path to sustainability was a smaller, tighter, more disciplined portfolio: one where every facility could stand on its own.
Since 2022, Ascension has reduced its hospital footprint from 139 facilities to approximately 90 fully owned hospitals and 29 joint ventures. The transactions were decisive and at times dramatic: eight Illinois hospitals sold to Prime Healthcare in March 2025, UAB Medicine’s $450 million acquisition of Ascension St. Vincent Health System in Alabama in late 2024 and a joint venture with Henry Ford Health that involved 10 Ascension hospitals in Michigan. Collectively, these moves shed significant operational complexity, and the losses that came with it.
Saurabh Tripathi, joined Ascension as executive vice president and CFO in April 2024 from Highmark Health and introduced three internal principles that gave the organization a shared language for hard decisions.
The first, “Control the Controllables,” focused leadership attention on what the organization could actually influence and dismissed distraction. The second, “Break the Bracket,” used data-driven operational interventions to lift chronically underperforming ministries out of loss. The third, “Every Ministry should be Sustainable,” established that no hospital could survive indefinitely on system subsidies and each facility had to justify its own capital. Mr. Tripathi described the third principle at Becker’s 2025 Annual Meeting: “Each hospital must be self-sustaining; you can’t keep borrowing from another to survive. Every entity must stand on its own from a capital standpoint.”
Setting that direction was Mr. Conrado, who succeeded longtime CEO Joseph Impicciche. Mr. Conrado joined the system in 2018 as its first chief digital officer, later serving as chief strategy and innovation officer. He has described the recovery as the payoff from years of operational discipline rather than a single financial maneuver, saying his team started with the fundamentals: how the system runs, how it steers patients to the appropriate site of care and how it manages the revenue cycle.
That work preceded the financial results by several years. Mr. Conrado told Becker’s the health system has “done over $2 billion turnaround over the last few years,” with momentum continuing this fiscal year. He also championed the pivot toward outpatient care, including the $3.9 billion AmSurg acquisition, positioning ambulatory growth as Ascension’s next phase.
“One of the nice things of being the president first for three years and then transitioning to CEO is just a continuation of the strategies that we’ve been working on,” Mr. Conrado said. “We’ve been focused on patient experience, associate engagement, diversification of our portfolio and quality and safety as the foundation of what we do. Then we look at how we serve the communities and how we shift our portfolio to be more ambulatory.”
The results have been substantial. Through the first nine months of fiscal year 2026, Ascension’s operating loss narrowed to $203 million (-1.1% margin) from $466 million (-2.4% margin) in the prior-year period. Net income reached $621 million through that nine-month window — a 218% year-over-year improvement. Speaking on Becker’s “CFO+Revenue Cycle Podcast,” Mr. Tripathi said the system had seen “almost $2.6 billion of financial turnaround” over the previous two and a half years, with another $1 billion in improvement targeted for fiscal 2026.
The portfolio reduction did reduce revenue. Total operating revenue for the nine-month period fell to $18.1 billion from $19.5 billion, a direct reflection of the smaller hospital footprint. But operating expenses fell faster still, dropping to $18.3 billion from $20 billion. Salaries and wages alone declined $810 million year over year, a product of fewer facilities and fewer positions rather than workforce reductions at retained hospitals.
With its balance sheet stabilized — $44.6 billion in total assets, $9 billion in long-term debt and a debt service coverage ratio of 10.4x — Ascension has moved decisively back toward growth. In June, the system acquired Amsurg, which operates more than 250 ambulatory surgery centers across 34 states, for a reported $3.9 billion. It also recently acquired Cedar Park (Texas) Medical Center for $436 million.
“We have to get ahead in the ambulatory business, because that’s where care is going,” Amber Sims, Ascension’s executive vice president and chief strategy and growth officer, said at Becker’s CEO+CFO Roundtable in November 2025. “It’s where patients want to receive care, where payers want to seek care, and where providers want to provide care.”
The AmSurg deal gives Ascension an immediate national outpatient footprint that rivals Tenet Healthcare’s United Surgical Partners International and Optum’s SCA Health.
Where the playbooks diverge
The surface-level contrast — CommonSpirit transforming from the inside, Ascension shrinking from the outside in — understates how different the two bets really are.
Ascension executed its portfolio reduction early and decisively, absorbing near-term revenue loss to create longer-term cost clarity. The result is a system with a more predictable operating baseline — smaller, but more stable — from which to reinvest aggressively in outpatient. After fiscal years that produced losses measured in billions, Ascension’s trajectory looks, by most metrics, like a system that has turned the corner.
CommonSpirit is earlier in a more complex transformation. Unlike Ascension’s portfolio-first approach, Project Impact asks the system to run its existing operations better before fundamentally resizing them. That is arguably a harder operational and cultural problem to solve across 137 hospitals in 24 states, and it takes longer to show up in the income statement. The Conifer exit and Epic acceleration are likely the right long-term bets, but they are also expensive and disruptive in the near term, as the fiscal 2026 third-quarter figures make clear.
Federal policy headwinds complicate the picture for both systems, but especially for CommonSpirit. Mr. Lassiter has spoken directly about the financial exposure from HR 1, projecting more than $1 billion in annual revenue loss from cuts to provider fees, state directed payments and disproportionate share hospital funding. Operational efficiency alone cannot compensate for that level of structural revenue decline.
Neither turnaround is finished. But together, the two recoveries offer a practical framework for large-scale financial restructuring.
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