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The numbers behind the push
The 137-hospital system reported an operating loss before special charges of $578 million for the quarter ended March 31, a negative 5.8% margin, compared with an $85 million loss a year earlier. For the first nine months of its fiscal year, the operating loss reached $1.2 billion, and $3.4 billion after special charges tied to its exit from Conifer Health Solutions. CEO Wright Lassiter III has said the policy environment puts more than $1 billion of annual revenue at risk.
The stated goal is an EBITDA margin of 8% to 10%. The system posted 4.8% in fiscal 2025. CFO Michael Browning told investors on May 29 that the program now accounts for more than $6 billion of improvement over three years.
How the program is built
Project Impact has eight pillars, 17 workstreams and 186 initiatives, and about 65% of those initiatives have been approved. The pillars cover IT, business and clinical operations, the physician enterprise, growth, revenue, capital and human capital. A rapid realization plan targets measurable gains by early 2027, with most initiatives at full run rate by fiscal 2028.
Several moves stand out:
- Revenue cycle insourcing. CommonSpirit ended its Conifer agreement in January, taking a $2.2 billion special charge. Browning expects the cost to collect to fall from 5.5% to 6% of revenue to about 3%, worth more than $1 billion a year, with the transition done by January 2027.
- Platform consolidation. The system has cut its EHR portfolio from 19 systems to 11 and aims for a single EHR by 2030 and a single ERP by 2027.
- Portfolio pruning. It sold a North Dakota critical access hospital to Altru in March and plans to sell three more North Dakota hospitals to Altru and a three-hospital Ohio system to UPMC.
- Simpler governance. Leaders plan one corporate entity in each of the system’s 24 states.
What other boards can take from it
Three features are worth copying. The program is broken into a large number of owned initiatives rather than a few broad goals. Management has put a number on the short-term cost, with Browning saying restructuring will create a 1% to 2% headwind to EBITDA over the next year. And leaders have said publicly that no asset or function is exempt from review.
The risk is execution. A revenue cycle insourcing of this size, an EHR migration and several divestitures will all compete for the same leadership attention. Boards overseeing similar efforts should ask management which initiatives depend on one another, and which would be delayed first if the year goes badly.
Archive entry for Jun 14, 2026, added Nov. 11, 2026.