CommonSpirit Health Unveils "Project Impact" to Address Financial Challenges
**CommonSpirit Health**, one of the nation's largest nonprofit health systems, is launching a new turnaround plan called **Project Impact** to improve its operating performance after reporting another operating loss for fiscal year 2025. Executives met with investors on Wednesday, Oct 1, 2025, to outline the initiative aimed at expense reduction and revenue generation.
Financial Performance and Challenges
Despite improvements in fiscal year 2025, **CommonSpirit**’s departing CFO, **Daniel Morissette**, acknowledged that the system is "not where we need to be financially." The health system experienced an operating loss of $225 million in 2025, an improvement from the $875 million loss in 2024. However, operating expenses rose to $40.3 billion, driven by increases in supply and salary costs. While revenue increased, much of the progress was attributed to one-time government payments, including $645 million from the **Federal Emergency Management Agency (FEMA)** related to the COVID-19 pandemic.
Project Impact: A Turnaround Strategy
**Project Impact** is designed to help **CommonSpirit** "accelerate performance and aggressively challenge headwinds," according to CEO **Wright Lassiter III**. The plan aims to improve the system's financial standing within one to two years by focusing on both expense reduction and revenue generation at national and facility levels. More details are expected to be revealed later this fall.
Key Areas of Focus for Project Impact
**Project Impact** will address eight key areas to drive operational and financial improvements. These include:
- Digital and IT optimization
- Business operations
- Clinical operations
- Physician enterprise
- Revenue optimization
- Growth
- Capital position
- Human capital management
Strategic Growth and Market Considerations
While **CommonSpirit** is focused on improving its financial performance, its growth plans do not currently include increasing the size of its hospital portfolio. CEO **Wright Lassiter III** stated, "At this point, we’re not focused on hospital acquisitions. We’re primarily looking at ambulatory growth to meet the needs of our consumers and align with the future of healthcare delivery." Over the past two fiscal years, the health system has added 90 new ambulatory care sites. **CommonSpirit** will also closely examine underperforming markets, including Utah, Nebraska, Arkansas, and Tennessee, to identify opportunities for optimization or potential market exits.
Navigating Industry Headwinds
**CommonSpirit** is also bracing for several industry-wide challenges, including the potential impacts of the **One Big Beautiful Bill Act** in fiscal year 2028 and what **Morissette** described as "payer mischief," such as payment delays and denials. These factors contribute to the urgency surrounding **Project Impact** and the need for aggressive performance improvements.
