CommonSpirit doubles down on ambulatory care amid $738m operating loss

CommonSpirit Health intends to expand its ambulatory care network as part of an effort to turn around the system’s financial performance following a $738 million net loss in Q1 of its 2024 fiscal year, executives wrote in a November 15 earnings report.

The net loss follows a string of deficits for the Chicago-based nonprofit health system, which reported a $1.4 billion operating loss for its 2023 fiscal year and a $1.3 billion operating loss in 2022, Healthcare Brew previously reported. The company cited salary and supply costs rising faster than payer reimbursement rates as primary contributors to the system’s Q1 2024 loss.

The shift toward ambulatory care reflects a wider trend among health systems to move services outside traditional hospital settings, as ambulatory care is one of the “highest margin segments of the healthcare industry,” according to a 2020 McKinsey report.

“CommonSpirit’s goal is to seamlessly care for patients across all care settings, either at an individual care setting or by managing a patient’s journey across multiple settings,” per the earnings report. “To accommodate that, CommonSpirit continues to expand our ambulatory and virtual care points and enhance connections across the continuum of care.”

The health system recently purchased a number outpatient facilities, including 19 ambulatory imaging centers in California and Texas, seven ambulatory surgery centers in Arizona and California, and six primary and urgent care sites in California and Washington. The system plans to add up to eight more ambulatory care sites through 2028, as stated in the earnings report.

Besides expanding the system’s ambulatory care network, CommonSpirit executives said the company’s 2024 priorities include, among others, “creating an environment to attract and retain a high-performing workforce,” and “standardizing [its] many technology tools to fewer, integrated platforms.”

The health system also laid off 2,000 full-time employees in Q4 of its 2023 fiscal year in an attempt to cut costs, Healthcare Brew previously reported.

“More efforts are underway to provide the strong financial foundation this health ministry needs to provide care to everyone in the communities we serve, including the most vulnerable,” CommonSpirit CFO Daniel Morissette said in a statement on November 15.