Quarterly results from four of the country’s largest nonprofit health systems — CommonSpirit, Providence, Trinity Health and Ascension — spotlight an industry still caught between progress and pressure. Despite signs of stabilization, the four nonprofit giants continue to wrestle with inflation, lagging reimbursement and the long tail of labor and supply chain strain, compounded by looming Medicaid cuts and uncertainty around ACA enhanced subsidies.
Seven things to know:
1. While each system showed improvement compared to the prior year, only Providence and Trinity Health finished the quarter with a positive operating margin. Ascension and CommonSpirit continued to post operating losses, though both narrowed their deficits significantly.
2. Trinity Health posted the strongest results among the four systems for the three months ending Sept. 30, 2025. The Livonia, Mich.-based system more than doubled its operating income year over year, reaching $77.4 million, a 1.2% margin. Higher payment rates, stronger patient volumes and an improved payer mix contributed to the momentum, helping offset lower surgical volume that affected service mix. Net patient service revenue increased 3.7%, aided by increases in both volume and payment rates.
3. Providence also managed to turn a corner after years of sustained losses. The Renton, Wash.-based system reported a $21 million operating gain (0.3% margin) compared to a $208 million loss (-2.7% margin) during the same quarter last year. Revenue climbed to $8 billion, bolstered by a 4% increase in case mix-adjusted admissions. Although operating expenses continued to rise, particularly for pharmaceuticals and supplies, Providence’s ability to reduce contract labor by 33% was a key factor in its return to the black. CEO Erik Wexler noted that the organization had set a goal at the beginning of the year to reach break-even sustainability, with CFO Greg Hoffman crediting “focus and discipline” for the improved performance.
4. Ascension remained in negative territory but showed meaningful progress. The St. Louis-based system logged an $88 million operating loss (-1.4% margin) for the quarter — a significant improvement over the $221 million loss (-3.1% margin) reported a year earlier. Patient volumes continued to grow, buoyed by ongoing investments in ambulatory care and community-based services, and the system reduced length of stay by more than 2% without compromising care quality. Strong investment returns helped Ascension record a net income of $338 million (5.5% margin) for the quarter, although operating performance alone remained strained. The results come ahead of a CEO transition set for the end of the year, with President Eduardo Conrado slated to assume the top role on Jan. 1.
5. CommonSpirit faced the steepest financial challenges of the group. The Chicago-based system posted a $165 million operating loss, representing a -1.6% margin. However, the health system halved its operating deficit from the prior-year period, as revenue climbed 9% to $10.3 billion. Adjusted admissions rose 6% and outpatient visits increased as well, though emergency department volumes dipped. Persistent inflationary pressure — particularly in pharmaceuticals, surgical supplies and medical devices — continued to weigh heavily on expenses. CommonSpirit leadership emphasized that payer denials, slow payment timelines and reimbursement increases that have failed to keep pace with inflation remain major obstacles to financial stability. Without adjusting for the California Provider Fee Program, the system’s operating loss would have totaled $396 million.
“CommonSpirit has embarked upon a systemwide transformation journey with a focus on accelerating results within 12-18 months … to accelerate meaningful improvement in operating and financial performance and accelerate the transition to a more sustainable cost structure and operating model,” the health system said in a Nov. 14 news release. “The project will look at every aspect of operations across CommonSpirit, building upon results of prior work, accelerating in-flight initiatives and identifying new performance improvement opportunities.”
6. Across all four organizations, some trends were unmistakable. Demand for patient services continues to grow, and health systems are seeing encouraging signs in volumes and throughput. But rising supply costs, persistent wage pressure and a reimbursement environment that has not caught up to inflation continue to challenge margins. Each system described a push toward transformation — whether through service line redesign, tighter cost management, technology investments or workforce stabilization — as essential to navigating the next phase of recovery.
7. While the quarter reflects continued progress from the disruptions of recent years, it also highlights how uneven the financial landscape has become. Some systems are now edging into sustainable performance, while others remain several steps behind. All agree that the path forward will require more than incremental improvements and that the margin pressures that defined 2025 are unlikely to ease in the near term.
