Post-merger results: CommonSpirit closes Q2 with operating gain, $579M in net income

CommonSpirit Health, which operates 137 hospitals across 21 states, saw revenues and net income increase in the second quarter of fiscal year 2020, according to unaudited financial documents released Feb. 18.    

Chicago-based CommonSpirit was formed a year ago through the merger of San Francisco-based Dignity Health and Englewood, Colo.-based Catholic Health Initiatives. In the second quarter of fiscal 2020, which ended Dec. 31, CommonSpirit reported operating revenues of $7.5 billion, up from $7.2 billion in the same period a year earlier. Net patient service revenue and premium revenue increased year over year.

Compared with the second quarter of fiscal 2019, acute admissions, adjusted admissions and outpatient visits were up in the most recent quarter.

After factoring in a year-over-year increase in operating expenses, CommonSpirit posted operating income of $40 million in the second quarter of fiscal 2020, compared to an operating loss of $87 million in the same period a year earlier.

"These results demonstrate that we are gaining traction with the strategy and operating model we've put in place," Daniel Morissette, CommonSpirit's senior executive vice president and CFO, said in an earnings release. "A year into our new organization we have a clear vision and well-defined strategy, we are growing in key markets and service lines, and we are keeping our expenses in check."

CommonSpirit's operating income for the second quarter of fiscal 2020 did not include expected revenue from the California Provider Fee Program. When including expected provider fee income, operating income for the most recent quarter would be $148 million and EBITDA would be $636 million, the health system said.

CommonSpirit ended the second quarter of fiscal 2020 with net income of $579 million. That's compared to the second quarter of fiscal 2019, when the health system reported a net loss of $724 million.

"We still have significant work to do to realize our ambitious growth and savings goals, but there is no question that these results represent a step in the right direction," Mr. Morissette said.

Looking at the six-month period ended Dec. 31, CommonSpirit report net income of $320 million on revenues of $14.6 billion. In the same period a year earlier, the health system posted a net loss of $518 million on revenues of $14.3 billion.

 

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