CommonSpirit Health closed another fiscal year with operations in the red, with the large Catholic nonprofit pointing to expenses growth outpacing revenues “despite strong volume, salary cost management and higher productivity.”
The 138-hospital system reported an as-recorded operating loss of $687 million (-1.8% operating margin) for the fiscal year ended June 30, 2025, as compared to the prior year’s $581 million operating loss (-1.5% operating margin).
However, after adjustments to normalize delayed income from the California Provider Fee Program, CommonSpirit somewhat improved its stature with a $225 million operating loss (-0.6% adjusted operating margin) as opposed to fiscal 2024’s $875 million operating loss (-2.4% adjusted operating margin).
Net income in fiscal 2025 was $1.1 billion as recorded and nearly $1.6 billion as adjusted, both increases over the prior year’s respective $797 million and $503 million.
CommonSpirit’s total operating revenues, as adjusted, grew over $3.1 billion (8.5%) year over year to around $40 billion, with net patient and premium revenues growing by $2.2 billion (6.3%) to $37.1 billion.
Here, the system shouted out a 2.8% increase in (normalized) net patient and premium revenue per adjusted admission volume improvements as well as across-the-board volume gains. The latter included a 3.4% rise in adjusted admissions and a 1.3% reduction in the average length of stay for an acute admission.
On expenses, CommonSpirit tallied a total of $40.3 billion in fiscal 2025, up $2.5 billion (6.6%) from the prior year.
This included a $932 million (4.9%) increase in salaries and benefits spending “primarily due to an increase in adjusted admissions and continued salary inflation costs, partially offset by improved labor productivity and reduced contract labor spend,” management wrote in a filing. Supplies spending rose $514 million (8.8%) amid the greater volumes and inflation, while purchased services jumped $1.1 billion (10%) due to factors like higher medical fees.
An investment-fueled $1.8 billion nonoperating income rounded out CommonSpirit’s year and brought the system’s unrestricted cash and investments up $1.2 billion to $16.8 billion as of June 30, 2025. Normalized days cash on hand grew by just one day over the year to 157 days.
Though the system’s leadership said they were happy with the year’s modest gains, they echoed their nonprofit and for-profit peers by highlighting “broad inflationary pressures and reimbursement challenges caused by unfavorable payer behavior” as ongoing headwinds.
Management underlined a slew of efforts aimed at improving operating performance, including work on ambulatory service expansion and capacity optimization to boost volumes, cracking down on clinical denials prevention and escalating payment disputes with payers to increase revenues and “service rationalization, for those markets where performance is currently below requirements.”
“We continue to be encouraged by year-over-year improvement in our financial performance,” CommonSpirit Chief Financial Officer Dan Morissette said in a release. “However, we remain focused on key strategic priorities including leveraging our size and scale to realize operational efficiencies, continued diversification and ensuring we are paid for the care we provide.”
CommonSpirit employs more than 160,000 people across 24 states and over 2,300 care sites including its hospitals. It reported nearly $5.2 billion during fiscal 2025 in total community benefits including unpaid costs of Medicare care delivery, a $935 million increase over the prior fiscal year.
Also Thursday, the system announced a new partnership with emergency medical services data and software provider ESO to launch an interoperable records platform for CommonSpirit’s Utah hospitals and local first responders.