Health Care

Revenues Down at Community Health Systems

FRANKLIN, Tenn. – Community Health Systems Inc. ended the second quarter of 2016 with net operating revenues down 6.0% from the same period a year ago. Revenues also were down 2.1% for the first six months of the year compared to last year, the company reported Tuesday.

The company operates ValleyCare Health System of Ohio Inc. in northeastern Ohio and Sharon Regional Health System in Pennsylvania

Net operating revenues for the three months ended June 30 totaled $4.59 billion, compared with $4.88 billion for the same period in 2015. During the period, CHS recorded a non-cash impairment charge of $1.40 billion to reduce the value of goodwill for its hospital reporting unit; a charge of $169 million to reduce the value of long-lived assets at certain hospitals that CHS is marketing for sale; and a charge of $70 million to reduce the value of long-lived assets at certain under-performing hospitals.

Adjusted earnings for the second quarter was $563 million compared with $769 million for the same period in 2015, representing a 26.8% decrease.

The consolidated operating results for the three months ended June 30 reflect a 9.1% decrease in total admissions, and an 8.5% decrease in total adjusted admissions, compared with the same period in 2015. On a same-store basis, admissions decreased 2.1% and adjusted admissions decreased 0.6% during the three months ended June 30, compared with the same period in 2015. On a same-store basis, net operating revenues increased 1.2% during the three months ended June 30, compared with the same period in 2015.

Net operating revenues for the six months ended June 30 totaled $9.59 billion, compared with $9.79 billion for the same period in 2015. Adjusted earnings for the first half of 2016 was nearly $1.20 billion compared with $1.48 billion for the same period in 2015, representing a 19.4% decrease.

For the six months ended June 30, total admissions were down 5.7% total adjusted admissions down 3.9% compared with the same period in 2015. On a same-store basis, admissions decreased 2.1% while adjusted admissions increased 0.4% during the six months ended June 30, compared with the same period in 2015. On a same-store basis, net operating revenues increased 1.8% during the six months ended June 30, compared with the same period last year.

“During the second quarter, we completed the successful spin-off of Quorum Health Corp.. Additional divestiture activity is underway as part of our portfolio rationalization strategy, which we believe will ultimately produce a higher performing, more sustainable group of hospitals and outpatient services,” Wayne T. Smith, chairman and chief executive officer of CHS, said.

“While our operating performance fell short of expectations this period, our management team and local operators are aggressively pursuing key initiatives and growth opportunities in markets where we believe we have the greatest potential to generate better operational and financial results,” he added.

Published by The Business Journal, Youngstown, Ohio.