Quorum Health records $27.6M net loss, says concentration on divestitures will continue

Brentwood, Tenn.-based Quorum Health Corp. reported a 4 percent decrease in operating revenues in the first quarter of fiscal year 2017, primarily due to the divestiture of two hospitals.

The 36-hospital system reported operating revenues of $527.6 million in the first quarter, a decrease from the $549.6 million in same period the year prior.

The decrease in operating revenues is primarily attributable to a nearly $13 million decrease in operating revenues resulting from the December 2016 sale of two hospitals: Sandhills Regional Medical Center in Hamlet, N.C., and Barrow Regional Medical Center in Winder, Ga. Quorum said the hospital system also was unable to accrue California Hospital Quality Assurance Fee program revenues for the 2017 to 2019 program period pending CMS approval.

Overall, Quorum ended the first quarter with a net loss of $27.6 million, compared to a net loss of $5 million for the same period in 2016. The hospital system said the net loss was negatively affected by various factors, including a $3.5 million decrease reflecting the two hospitals divested in December 2016, an $8.3 million decrease related to the California HQAF program and $3.3 million of impairment charges.

Additionally, same-facility admissions decreased 0.6 percent in the first quarter compared to the same period in 2016. When adjusted for outpatient activity, admissions increased 0.4 percent in the first quarter. These numbers exclude the affect of leap day in 2016.

Quorum is currently working to improve its financial picture through divestitures. In addition to the divestiture of two hospitals in December 2016, the hospital system signed a definitive agreement Friday to sell Henderson County Community Hospital, a 45-bed hospital in Lexington, Tenn., and 45-bed McKenzie (Tenn.) Regional Hospital to SHS Tennessee in Nashville.

"As we work to improve all aspects of the company, we continue to concentrate on divesting non-performing assets and focusing on markets that will lead this company forward with long-term strategic growth," Thomas Miller, president and CEO of Quorum, said in an earnings statement released Monday. "Our efforts are to focus our resources on those core operations and to continue to reduce costs and improve the efficiencies necessary to drive our profitability and reduce our debt levels. We are working diligently to grow our core markets, driving increased access to care with strong physician recruiting and service line expansion while maintaining our commitment to high quality standards."

 

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