- CommonSpirit Health, the product of a union between Dignity Health and Catholic Health Initiatives, reported its first annual financial statement following the close of its megamerger in February. The combined unit posted a net operating loss of $602 million, largely due to special charges and other costs related to the merger.
- However, when factoring in non-operating income, such as investment income, the system reported $9 billion in excess revenues over expenses.
- These results were expected given the "complexity of the combination," officials said in a statement.
The giant system said it expects to see significant financial improvement in the coming months but acknowledged challenges ahead.
"At the same time, we know our performance is not where we need to be if we're to build a sustainable health ministry for the future," Chief Financial Officer Dan Morissette said in a statement.
The Chicago-based system said it expects to trim costs significantly through a "system-wide performance-improvement plan." It also expects to achieve an 8% EBITDA margin (earnings before interest, taxes, depreciation and amortization) within the next four years.
Looking at the operations, volumes remained consistent year over year, with outpatient visits increasing 1.5% while adjusted admissions remained flat.
Overall for 2019, inpatient services represented 48% of patient revenue while outpatient made up 52%.
In terms of payers, the government is the largest, contributing $9.7 billion in net patient revenue, followed by commercial payers who paid $8.2 billion for patient care in 2019.
Overall, the system reported total operating revenue of nearly $21 billion for the year ended June 30, while noting total operating expenses of $21.2 billion.
Together the system spans 21 states and operates 142 hospitals and 700 other health facilities. The combined company employs 150,000 people and 25,000 physicians and clinicians.