Community Health Systems' Q3 profits dragged down by adverse payer mix, lower volume

Community Health Systems' profits took a hit from a decrease in same-hospital admissions in the third quarter of fiscal year 2015, the Franklin, Tenn.-based hospital chain said in a preview of its results on Wednesday.

On a same-hospital basis, CHS reported a 2.1 percent decline in admissions compared to the same period of 2014. When adjusted for outpatient activity, the hospital chain reported a 0.1 percent decline.

Along with weakness in volume, CHS said a deterioration in its payer mix during the first half of the year led to lower than anticipated net operating revenues during the period.

CHS also increased the number of employed physicians, which caused its cost of salaries and benefits to increase to 46.2 percent of net revenue in the third quarter, up from 45.7 percent of net revenue in the same period of the year prior.

CHS expects to report third-quarter income from continuing operations of $121 million on $4.84 billion in revenue, compared to $133 million from continuing operations on $4.78 billion in revenue for the same period in 2014.

The hospital network's shares fell 15 percent in after-hours trading on Wednesday to $34.41, according to The Wall Street Journal.

CHS is scheduled to report full results on Nov. 2.

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