Community Health System Q4 profit jumps $72M amid rising patient volumes

Franklin, Tenn.-based Community Health Systems' fourth-quarter net income was up $72 million compared to the same period of the prior year due largely to the system's acquisition of Naples, Fla.-based Health Management Associates and stronger patient volumes.

With the inclusion of HMA hospitals, CHS' net operating revenues for the fourth quarter, which ended Dec. 31, 2014, totaled $4.9 billion, up 54.1 percent from the same period of 2013.

The for-profit hospital operator posted $100 million in net income for the fourth quarter of 2014, up from $28 million in net income for the same period of the prior year.

Improved patient volumes helped propel the system's strong earnings, with total admissions increasing 56.4 percent at CHS facilities in the fourth quarter. On a same-hospital basis total admissions fell 0.2 percent. However, when adjusted for outpatient activity, same-hospital admissions increased 2.7 percent compared to the same period of 2013. For the year, CHS' total admissions were up 43.7 percent and adjusted admissions were up 47.3 percent.

CHS Chairman and CEO Wayne T. Smith said he is encouraged by the system's stronger volume trends, which he said were driven partly by a more severe flu season in the fourth quarter of 2014.

CHS said its financial results for the fourth quarter of 2014 included expenses related to its merger deal with HMA and a $75 million reserve, which will be paid to settle allegations three of its hospitals in New Mexico violated the False Claims Act by providing funds to county governments that were used to fund Medicaid payments to hospitals.

"We are pleased with our overall operating performance, capping off an exceptional year for the company following the acquisition of HMA at the beginning of 2014," said Mr. Smith. "Since that time, we have worked hard to assimilate these additional hospitals, and we have made considerable progress in achieving our targeted operating synergies."

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