CHS Reports 4.3% Gain in Net Revenues for 2015
FRANKLIN, Tenn. – Community Health Systems Inc. ended 2015 with net operating revenues of $19.437 billion, up 4.3% from $18.639 billion for 2014.
The increase comes despite lower fourth-quarter revenues compared to the same period a year ago.
CHS, which operates ValleyCare Health System of Ohio and Sharon Regional Health System in Sharon, Pa., reported its annual and fourth-quarter results Monday.
Net income attributable to common stockholders was $1.37 per share (diluted) for the year ended Dec. 31, compared with $0.82 per share (diluted) for the same period in 2014.
Adjusted earnings for the year was $2.670 billion compared with $2.777 billion for the same period in 2014, representing a 3.9% decrease.
The consolidated operating results for the year reflected a 1.7% increase in total admissions, and a 3.5% increase in total adjusted admissions, compared with the same period in 2014. On a same-store basis, admissions decreased 1.8% while adjusted admissions increased 0.3% last year compared with the same period in 2014.
On a same-store basis, net operating revenues increased 2.4% for the year, compared with the same period in 2014.
The overall gain in net operating revenue for 2015 came despite a 2.4% decrease in same during the last three months of the year compared to a year earlier. Net operating revenues for the fourth quarter totaled $4.798 billion, compared with $4.918 billion for the same period in 2014.
Income from continuing operations attributable to common stockholders decreased to a loss of $74 million, or $0.66 per share (diluted), for the three months ended Dec. 31, compared with income of $129 million, or $1.12 per share (diluted), for the same period in 2014.
The financial results for the three months and year ended Dec. 31include a $169 million increase in allowance for doubtful accounts on the consolidated balance sheet and a corresponding $169 million increase to the provision for bad debts related to a change in estimate recorded during the three months ended Dec. 31. The adjustment reduced net operating revenues and adjusted earnings by $169 million and income from continuing operations by $108 million, or $0.96 and $0.94 per share (diluted), for the three months and year ended Dec. 31, respectively.
“The results for the fourth quarter of 2015 were affected by a number of factors, including volume weakness compared with a strong fourth quarter a year ago when we experienced higher emergency room visits and admissions attributed to respiratory illness and the flu,” Wayne T. Smith, CHS chairman and chief executive officer, said.
In addition, achieving “operational improvements” is taking longer than expected in the markets of the former Health Management Associates Inc., which CHS acquired in January 2014. Still, the company is confident those markets will improve over time, Smith said.
In addition, “certain adjustments” during the fourth quarter negatively financial results, including primarily the increase in the allowance for doubtful accounts; the impairment of long-lived assets, legal fees and settlement expenses; and costs from the planned spin-off of Quorum Health Corp., Smith continued
“Despite these challenges, we believe our physician recruitment initiatives, clinical and operational strategies, and rigorous expense management will drive sustainable improvements in 2016,” the CEO said.
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