After posting a $1.4 billion net loss in the third quarter of fiscal year 2020, CommonSpirit, a 140-hospital system based in Chicago, saw improved finances in the third quarter of fiscal year 2021, according to financial documents released May 14.
CommonSpirit, formed in 2019 through the merger of San Francisco-based Dignity Health and Englewood, Colo.-based Catholic Health Initiatives, reported revenues of $8.8 billion in the third quarter of fiscal 2021, up from $7.8 billion recorded in the same quarter one year prior. The health system said the third quarter of fiscal 2021 was the first period to fully include results from Virginia Mason Fransican Health, an 11-hospital system that was formed in January and joined the CommonSpirit network.
The health system’s operating expenses also increased year over year. It reported total expenses of $8.3 billion in the third quarter of fiscal 2021, compared to about $8 billion recorded in the same period last year.
CommonSpirit ended the third quarter of fiscal 2021 with an operating income of $539 million, a figure that included federal relief aid and a pre-tax gain on the sale of joint venture shares. CommonSpirit said without the aid and pre-tax gain, the health system would have posted an operating loss of $117 million in the quarter ended March 31, “highlighting the continuing concerns around overall patient volumes and the ongoing impact of the pandemic.”
After factoring in $1.2 billion in non-operating income, including $636 million in investment income, CommonSpirit posted a net income of $1.7 billion in the quarter ending March 31. In the same quarter one year prior, CommonSpirit recorded a net loss of $1.5 billion.
“In many ways this quarter was similar to what we experienced over the last year, with a very challenging period followed by a robust recovery,” said CommonSpirit CFO Dan Morissette in a May 14 news release. “With vaccination rates rising and many people returning to their pre-pandemic routines, we expect to continue a strong path to recovery, while also recognizing that we will likely see operational impacts from the pandemic for quite some time.”
CommonSpirit said it also is working to strengthen its financial foundation by realizing operational synergies this year. The goal is to realize $350 million to $400 million in savings during fiscal 2021, and it is on track to meet or surpass that goal.