CHS to roll out 'Project Empower' at all hospitals by end of 2024, says CEO

Franklin, Tenn.-based Community Health Systems aims to fully deploy its Project Empower initiative across all of its hospitals by the end of the year, CEO Tim Hingtgen said during the company's second-quarter earnings call.

Project Empower combines the Oracle Health Enterprise Resource Planning system with other financial, supply chain and human capital management systems offered by the tech company, CHS launched the program last year. 

The initiative aims to reduce costs and increase revenue by improving efficiencies and eliminating disparate technology systems across CHS as it continues to boost its operating margin and pay off $11.5 billion in long-term debt. Around half of CHS' hospitals still use Cerner clinical platforms.

"This investment is yielding deeper insights into our business functions, and we expect to identify opportunities for additional standardization, expense management and value creation as our experience with this enhanced operational tool matures," Mr. Hingtgen said. 

Project Empower is redesigning CHS' workflows, particularly for administrative and back-office functions, such as pharmacy and supply chain. An integrated system with Oracle will help manage these functions and them into a shared service environment through which the health system expects to gain a lot of efficiencies.  

The systemwide modernization and optimization initiative will also provide better access to and management of large-scale data and accelerate decision-making processes across CHS' 70 hospitals. 

"We were particularly pleased to see outperformance in the hospitals where we have implemented new technology and workflows and as part of Project Empower, which is providing better insight into procurement savings opportunities that we believe will continue to grow," CFO Kevin Hammons said. 

CHS reported $238 million in operating income (7.6% margin) in the second quarter, down slightly from $246 million (7.9% margin) during the same period last year. Other expenses, primarily $216 million in interest costs, left the health system with a net loss of $13 million in the second quarter. CHS paid $207 million in interest costs during the same period last year and reported a net loss of $38 million.

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