Three of the largest nonprofit health systems, Providence, CommonSpirit and Trinity Health, reported operating losses and margins in the red for the three months ending Sept. 30, with higher labor and supply costs across the board. However, the systems all experienced increases in revenue as patient volumes continue to rebound.
Here's how the three systems' finances compare in the three months ending Sept. 30, according to their most recent financial documents.
Renton, Wash.-based Providence posted a $310 million operating loss in the third quarter, down from a $164 million loss in the same period last year.
Despite a 5% year-over-year increase in third-quarter revenue, the 51-hospital system's overall performance was affected by a 7% increase in expenses — largely driven by wage increases, higher supply costs and higher costs to serve patient volumes.
In the third quarter, salary and benefit expenses rose 8% year over year. Supply costs increased 8% compared to the third quarter of 2022, largely due to a 21% increase in pharmaceutical costs, according to the health system.
Providence experienced higher volumes in the third quarter, with case-mix adjusted admissions up 5.2% compared to the same period in 2022. Operating revenues increased 11% year over year and was largely driven by double-digit growth in premium and diversified revenues.
EBIDA was $104 million — the fifth consecutive quarter of positive results — and net operating losses were $310 million. Investment losses drove $71 million in non-operating losses in the quarter.
Livonia, Mich.-based Trinity reported an operating loss of $58.6 million (-1% margin) in the first quarter of the fiscal year — the three months ended Sept. 30 — compared to a $146.3 million loss (-2.9% margin) during the same period in 2022.
For the fiscal first quarter, operating revenue increased 12.4% year over year to $5.6 billion. Revenue growth was driven by the acquisitions of Des Moines, Iowa-based MercyOne, Grand Haven, Mich.-based North Ottawa Community Health System and Davenport, Iowa-based Genesis Health System.
Operating expenses for the quarter increased 10.3% year over year to $5.7 billion with acquisitions accounting for $489.7 million of the overall increase.
Excluding the impact of the acquisitions and divestiture of St. Francis Medical Center in Trenton, N.J., operating expenses for the quarter increased 1.7% year over year. Total operating costs per case remained flat to prior year as Trinity said it continues to tightly manage operating costs amid inflation.
Overall for the three-month period, the health system reported a $211.5 million net loss (-3.9% net margin), compared to a $565 million loss (-12.3% net margin) for the same period last year.
Chicago-based CommonSpirit reported an adjusted operating loss of $291 million on revenue of $8.9 billion for the first quarter of fiscal 2024, ending Sept. 30.
The adjusted figure reflects the effects of the California provider fee program. Without that adjustment, the system reported an operating loss of $441 million versus a $23 million gain the previous year.
The adjusted figures compared with an operating loss of $227 million in the same period last year with revenue of $8.5 billion. Salaries and benefits increased $174 million or 3.9% over the prior-year period.
Volumes increased in the quarter, with adjusted admissions on a same-store basis rising 4.8% compared to the prior-year period. Average length of acute stay decreased from 4.92 days to 4.74 days as a result of continued efforts to manage the continuum of care. Outpatient visits increased 3.8% and emergency department visits rose 2%.