Chicago-based CommonSpirit saw its supplies per adjusted admission increase 3% year over year in the first quarter of fiscal 2026, according to its Nov. 14 financial report.
CommonSpirit attributed the growth to higher surgical volume and continued inflationary pressure on pharmaceuticals and surgical and medical supplies. The system said it is “working to reduce supply costs through renegotiation of supply chain contracts and vendor consolidations.”
In 2024, CommonSpirit underwent a comprehensive portfolio review, consolidating eight operating divisions into five regions, completing multiple hospital transactions and implementing various changes with an intentional focus on each geographic market. With the completion of that process, CommonSpirit said it is focusing on leveraging the model “with an aim to strengthen relevance across CommonSpirit markets.”
“In concert with this, the focus at the system level is on realizing economies of scale nationally, including coordinated supply chain, clinical equipment and infrastructure programs, which were implemented in fiscal year 2025,” CommonSpirit said in the report.
The 138-hospital system is also applying AI to the management of its supply chain processes.
“CommonSpirit has identified ways to increase transparent purchasing and ensure fair payment from vendors for the numbers of procured supplies,” the system said in the report. “This process is expected to save millions of dollars going forward.”
Supply expense as a percentage of net patient and premium revenue was 17.4% for the three months ended Sept. 30, up from 17.3% during the same period last year.
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. Figures are adjusted to normalize the California Provider Fee Program net income.
