CHS swings to $70M profit in Q2, plans to sell more hospitals

Franklin, Tenn.-based Community Health Systems, which recorded a $70 million profit in the second quarter, plans to sell more hospitals this year, according to recently released financial results

Nine things to know:

1. CHS reported a net income of $70 million in the second quarter, compared to a net loss of $167 million in the same period in 2019.

2. CHS' net operating revenue fell 23.7 percent year over year, to $2.5 billion in the three-month period ended June 30. This compares to $3.3 billion in the same period last year. 

3. The company saw its expenses fall year over year, from $3.2 billion in the second quarter of 2019, to $2.2 billion in the second quarter of 2020.

4. CHS recorded an operating income of $296 million in the second quarter, up from $111 million in the same period in 2019. 

5. CHS said it is nearing the end of its hospital divestiture strategy, which it began in 2017. So far this year, CHS has sold seven hospitals, three of which were sold on Jan. 1; two on May 1; and two on July 1. The company has entered into definitive agreements to sell five more hospitals this year for a total of $430 million. When those sales close, it will mark the end of the company's formal portfolio rationalization strategy, according to the financial report. 

6. On a same facility basis, CHS reported that its admissions dipped 18.1 percent, and adjusted admissions decreased 24.2 percent, compared to the same period in 2019. CHS said the volume declines were most pronounced in April 2020 due to the COVID-19 pandemic.

7. During the three-month period ended June 30, the company received $564 million in coronavirus relief aid, CHS said. However, it will return some of the relief funding to HHS because it received some amounts for previously divested hospitals.

8. CHS also said it received $109 million in relief aid payments in July that are not included in the total, and that it received more than $1.2 billion in advance Medicare payments. 

9. "I am proud of our hospital leadership teams and the corporate support teams that have demonstrated agility and resilience under pressure and leveraged all of the resources of our organization to support their community response as well as one another," said CHS Chairman and CEO Wayne Smith. "We will continue to adapt to this evolving situation with a steadfast commitment to provide the best possible response to this public health crisis, while at the same time focusing on long-term growth for all of the company's stakeholders."

More articles on healthcare finance:
UHS sees profit grow to $251.9M in Q2
GOP unveils $1 trillion COVID-19 relief package: 9 things to know
46 jobs cut at New York health system

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