Becker's Hospital Review

9 CFO / FINANCE CommonSpirit strategy pays dividends, but CFO insists 'still more to do' By Alan Condon C hicago-based CommonSpirit is making significant strides to improve its financial performance — transforming a $440 million operating loss in the fourth quarter of 2022 into a $356 million gain in the fourth quarter of 2023 — but CFO Dan Morissette insists "there is still more to do." Normalized for the California provider fee program, operating losses for the fiscal second quarter (the three-months ended Dec. 31) were $87 million, compared to normalized losses of $440 million during the same periods in 2022. A big contributor to recent losses include labor and supply inflation increasing at a higher rate than reimbursement, but this has been partially offset by improved patient volumes, length of stay and productivity, the 142-hospital system said in a Feb. 15 financial report obtained by Becker's. "We remain focused on further improving our financial performance by exploring growth opportunities, sound investment strategy and cost containment," Mr. Morissette said. "We are also taking steps to reverse some of the financial trends which have been exacerbated by both inflationary pressures and payers' continued unwillingness to be better partners." In FY 2022, the system launched "CommonSpirit 2026," a five-year strategic roadmap. e framework aligned all of the system's mid- and long-range initiatives and workstreams — and their associated metrics — under three key pillars: "Our People, Our Excellence and Our Future." Under the leadership of Wright Lassiter III, who took over as CEO in August 2022, the health system said efforts related to CommonSpirit 2026 have been injected with fresh perspectives and new strategies. Consistent with FY 2024 priorities, the system has framed priorities for the upcoming FY 2025. Health system leaders have outlined five key areas to improve performance over the next 12 to 18 months and ensure the long-term financial sustainability: - Achieve "One CommonSpirit," by defining a unified culture, brand and operations, aligning approaches to increase efficiency and leverage scale. - Ensure the system is paid for the care it provides by working with payers and revenue cycle partners. - Transform the CommonSpirit portfolio through diversification in non-acute verticals, strategic capital deployment, among other portfolio adjustments. - Drive organic growth through expanded access points and better care coordination to facilitate consumer' utilization of the health systems' care networks. - Launch a digital consumer experience to increase access to care for patients. CommonSpirit is also evaluating the markets in which it operates to identify "market essentiality." is includes analyzing each market's current position and potential, defining strategies and aligning capital investments for maximum impact. ough not the primary intent, CommonSpirit said this may result in additional hospital acquisitions and divestitures. Recent examples of this include the acquisition of five Utah hospitals from Steward Health Care hospitals in May. CommonSpirit also plans to offload two hospitals to UCSF Health in a deal that it says will create a stronger care network for residents in the San Francisco Bay Area. n Why Optum, SSM Health cut ties By Jakob Emerson S t. Louis-based SSM Health and UnitedHealth Group's Optum ended their administrative partnership around inpatient care management, digital transformation and revenue cycle management after the two organizations were not able to meet "mutually agreed-upon expectations." In an Aug. 21 internal memo shared with Becker's, SSM President and CEO Laura Kaiser told the system's hospital care management and RCM teams that the termination was a difficult decision but was "in the best interest of our patients, families and team members." The partnership was announced in October 2021 and formally began in early 2022. The deal included the hiring of about 2,100 SSM employees by Optum. "We will be working quickly over the next few months to bring our hospital care management and revenue cycle management teams and services back to SSM Health," Ms. Kaiser wrote. "Our hope is to make this process as smooth and as seamless as possible." She said the health system would extend employment offers to Optum employees supporting SSM Health ministries. "I want to acknowledge and apologize for any disruption this transition may cause. Thank you for your patience and continued dedication," Ms. Kaiser wrote. "I am deeply grateful for all you do on behalf of our mission and those we serve together." Hospitals and health systems that have previously outsourced administrative functions to Optum include Minneapolis-based Allina Health; Waukesha, Wis.- based ProHealth Care; Cooperstown, N.Y.-based Bassett Healthcare Network; Greenbrae, Calif.-based MarinHealth; Boulder (Colo.) Community Health; Walnut Creek, Calif.-based John Muir Health; Brewer, Maine-based Northern Light Health; and Owensboro (Ky.) Health. n

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