Community Health Systems Announces Results, Spinoff
FRANKLIN, Tenn. – Net operating revenues for Community Health Systems Inc. were up 2.5% during the second quarter of 2015, the company announced Monday.
CHS, which operates Valley Care Health System of Ohio in northeastern Ohio and Sharon Regional Health System in western Pennsylvania, also announced it is spinning off a group of 38 hospitals and Quorum Health Resources LLC, a hospital management and consulting business, to a group of shareholders early next year.
Quantum will operate independently with its own board of directors and management team. The 38 hospitals will have a total of 3,635 beds in 16 states. None of the affected hospitals are in the Mahoning and Shenango valleys. Affinity Medical Center in Massillon is the only hospital in Ohio included among the 38.
Spinning off the 38 hospitals and Quorum to create a new publicly traded hospital company, which will be named Quorum Health Corp., “will realign our portfolio into two strong and focused companies that can respond to market demands with greater agility and that are better positioned to take advantage of growth opportunities, while creating additional value for our shareholders,” said Wayne T. Smith, chairman and CEO of CHS.
Over the past 30 years, CHS has evolved from a collection of smaller hospitals into “a much more complex and diversified portfolio of hospitals, outpatient services and health-care systems across the country,” he continued. The transaction will allow Quantum to focus on changes in the health-care delivery system, which are different in smaller community hospitals from CHS’ larger, more urbanized markets, Smith said.
CHS said its net operating revenues for the three months ended June 30 totaled $4.882 billion, up from $4.765 billion for the same period in 2014. Adjusted earnings for the quarter was $769 million, compared with $700 million for the same period in 2014, a 9.9% increase.
For the six months ending June 30, net operating revenues totaled $9.793 billion, a 9.5% increase from the $8.941 billion for the first half of 2014. Adjusted earnings for the first six months of the year totaled $1.483 billion, a 19.4% increase from the $1.242 billion reported for the first six months of 2014.
The results include operating synergies from the integration of the Health Management Associates Inc. hospitals, the benefit of numerous strategic initiatives, and the incremental opportunities created by the Affordable Care Act, Smith said.
SOURCE: Community Health Systems Inc.
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