Quorum Health sees net loss narrow to $30.6M, plans more hospital sales

Brentwood, Tenn.-based Quorum Health ended the second quarter of 2017 with a net loss, but the company hopes to improve its financial picture by continuing to restructure its portfolio.

The 34-hospital system, which is a spin-off of Franklin, Tenn.-based Community Health Systems, reported revenues of $530.1 million in the second quarter of this year, up from revenues of $529.7 million in the same period of 2016. Quorum said hospital divestitures and a drop in revenues under the California Hospital Quality Assurance Fee program negatively affected revenue growth in the second quarter this year.

After factoring in a 32.8 percent decrease in expenses year over year, Quorum ended the second quarter of 2017 with an operating loss of $362 million, compared to an operating loss of $259.3 million in the same period of the year prior.

Quorum's net loss for the second quarter of this year was $30.6 million, compared to a net loss of $245.1 million in the same period of 2016, when the company recorded $250.4 million of impairment charges.

Quorum is focused on restructuring its portfolio to improve its financial performance. The company began a divestiture spree last year, selling Sandhills Regional Medical Center in Hamlet, N.C., and Barrow Regional Medical Center in Winder, Ga., in the fourth quarter of 2016. The company continued selling off hospitals this year, divesting Cherokee Medical Center in Centre, Ala., in March and Trinity Hospital of Augusta (Ga.) in July. Quorum also inked definitive agreements this year to sell four hospitals — Henderson County Community Hospital in Lexington, Tenn.; McKenzie (Tenn.) Regional Hospital; Sunbury (Pa.) Community Hospital; and Lock Haven (Pa.) Hospital — and signed a letter of intent to divest L.V. Stabler Memorial Hospital in Greenville, Ala.

Quorum CEO Thomas D. Miller said in a second quarter earnings release the company plans to continue selling off hospitals in the third quarter. 

"Our strategy to divest underperforming hospitals will improve our financial position. Our plan is to complete additional divestitures during the third quarter resulting in continued reductions in debt levels," he said.

Mr. Miller said the company also expects to benefit from improvements in billing and collections.

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