Article
The numbers
For the quarter ended March 31, CommonSpirit reported operating revenue of $10.0 billion, flat with a year earlier, while operating expenses before special charges rose to $10.6 billion from $10.1 billion. The operating loss before special charges was $578 million, a negative 5.8% margin, compared with an $85 million loss a year earlier. EBITDA before special charges fell to $71 million from $434 million.
The net loss reached $3.4 billion, driven by $2.4 billion in special charges, largely tied to ending its Conifer Health Solutions arrangement. Excluding those charges, the net loss was $762 million. Demand was not the problem: adjusted admissions rose 3.2%, and average length of stay improved to 4.70 days from 4.83.
Why exit Conifer
Tenet Healthcare is regaining full control of Conifer, and CommonSpirit will pay Tenet about $1.9 billion over three years, with total exit costs expected near $2.2 billion. CFO Michael Browning has said the system’s cost to collect is about double the industry average and that reaching the median would cut costs materially. Bringing revenue cycle work in-house is also expected to speed its Epic rollout by a few years.
The system is reshaping its footprint as well. It sold a critical access hospital in North Dakota to Altru Health System, is in talks to sell three more there and agreed to sell three Ohio hospitals to UPMC. A one-time $383 million FEMA payment will be recorded in the fourth quarter.
What other systems should take from it
- Watch the spread: Expenses grew about 5% while revenue was flat. Few systems can absorb that gap for long.
- Benchmark cost to collect: Long outsourcing contracts can lock in high costs. Know your figure, your peers’ figure and your exit terms.
- Price exits fully: Model a one-time charge against multiyear savings, and test the effect on covenants and ratings before deciding.
- Prune deliberately: Selling hospitals to regional buyers with local scale can serve communities and the seller better than holding weak assets.
- Do not rely on one-time money: FEMA and similar receipts help liquidity but do not fix run-rate margins.
Archive entry for May 24, 2026, added Nov. 11, 2026.