CommonSpirit Health reported a net loss of $1.85 billion for fiscal year 2022 and ended the year with an operating profit margin of -3.8%, the Catholic nonprofit health system revealed Thursday. .
The Chicago-based company’s operating results for the year ended June 30 compared with a net profit of $5.19 billion for the preceding 12-month period. Operating expenses increased 9% to $35.2 billion and revenue increased 2% to $33.9 billion. CommonSpirit cites rising labor costs, higher prices due to inflation, lower patient numbers and reimbursements that have not kept pace with costs as challenges.
The end of federal COVID-19 relief is another factor. CommonSpirit has received $1.6 billion in CARES Act grants as of June 30, most of which was awarded in 2020 and 2021.
CommonSpirit’s 2022 financial results could be better depending on the upcoming federal decision. California is waiting for the Centers for Medicare and Medicaid Services to approve a policy designed to assist hospitals in treating Medicaid enrollees and uninsured patients. If the federal government renews a program that expired last year, eligible California providers will receive an additional retroactive reimbursement. For CommonSpirit, that will translate to an estimated $260 million in additional net income in the first half of fiscal 2022, according to the company.
“This continues to be a very challenging time for health systems, especially nonprofit health systems like CommonSpirit where the majority of patients are beneficiaries,” said Chief Financial Officer Dan Morissette. Medicare and Medicaid. “As an integrated organization with broad reach, we can take many steps to reduce costs and increase revenue. But obviously we need to do more to improve performance.”
The CommonSpirit Health CEO was not available for an interview.
In August, Wright Lassiter III, formerly of Detroit-based Henry Ford Health, took over as CEO of CommonSpirit, succeeding Lloyd Dean, who announced his retirement a year ago.
Earlier this month, CommonSpirit ended a 25-year partnership with Michigan-based Livonia, Trinity Health, as Trinity completed its acquisition of MercyOne, a health system based in Clive, Iowa.
Most health systems are suffering huge losses this year. Ascension is based in St. Louis reported a net loss of $1.84 billion for the most recent fiscal year. The Ohio-based Cleveland Clinic posted a net loss of $1.07 billion for the first half of the year. Providence of Renton, Washington, posted a loss of nearly $2 billion in its first six months.
