On Dec. 12, Kevin Hammons and Jason Johnson formally stepped into leadership roles at Franklin, Tenn.-based Community Health Systems as CEO and executive vice president and CFO, respectively. They took over the positions after serving in them on an interim basis since Oct. 1.
Their appointments come at a pivotal moment for the for-profit health system, which is divesting hospitals in certain markets while sharpening its focus on core services and geographies. CHS’ divestiture strategy has helped reduce debt to its lowest level in more than a decade, and the company is beginning to realize benefits from its new enterprise resource planning system, which is driving increased operational efficiencies and expected to generate up to $60 million in savings in 2025.
In conversation with Becker’s, Mr. Hammons and Mr. Johnson shared their perspectives on CHS’ strategic direction heading into 2026, including capital deployment, hospital performance, ERP transformation and leadership alignment across the organization.
Editor’s note: Responses have been lightly edited for length and clarity.
Question: With new leadership now formalized, how are you thinking about CHS’ strategic direction heading into 2026? What feels most urgent, and what are your top priorities in the first half of the year?
Kevin Hammons: I’ve been at CHS for 28 years. I’ve had the pleasure of being along for the ride and watching us grow. When I joined, we were a private company focused on rural hospitals; about 85% of our markets were sole community providers. We’ve evolved into the organization we are today.
There’s a lot of disruption in the industry, whether from payers, regulation or technology. Strategically, it’s important that we not get too distracted. For me, it’s about focusing on quality: quality of care and quality of people.
What feels most urgent is adding clarity across the organization. With all the disruption, it’s easy to get distracted. We have exceptionally talented people here, and my job is to make sure we’re all rowing in the same direction. That alignment is key to accelerating progress in quality and patient experience. Competing priorities are real, but clarity and alignment help us move faster.
Q: Jason, congrats on your appointment as CFO. What’s at the top of your agenda in your first 180 days? How are you thinking about capital deployment and financial stabilization?
Jason Johnson: We’re continuing to look for opportunities to further reduce our debt and leverage. Our debt levels entering 2026 will be the lowest in over a decade. Our leverage was 6.7 times as of Sept. 30, 2025 — down from 7.4 times on Dec. 31, 2024, and 7.9 times the year before that. We generated positive adjusted free cash flow on a 12-month basis as of Sept. 30, marking the first time since the second quarter of 2022. So there’s a lot of positive momentum. As we look ahead to 2026, we’re focused on increasing our investments in growth projects, which should further accelerate free cash flow and allow us to continue decreasing our debt and leverage.
Q: CHS has gone through multiple divestitures, including the recent $194 million Labcorp deal. What’s the strategy behind these moves, and how do they position CHS for the future?
JJ: If we step back a bit, our projected 2025 net revenue and adjusted EBITDA are actually in line with where we were in 2019, despite having nearly 40 fewer hospitals. So from a net revenue and EBITDA perspective, our company profile and size haven’t really changed. However, our debt is projected to be $3 billion lower than it was on Dec. 31, 2019. Proceeds from divestitures this year will exceed $1 billion, and we’ve used those proceeds to reduce debt and leverage. Earlier this week, we repurchased $235 million in principal of our outstanding senior notes, using proceeds from the Labcorp deal we mentioned.
KH: In my prior role as CFO, I had the opportunity to oversee much of our divestiture program over the past several years. It’s really helped reposition us. We had found ourselves carrying far too much debt, and as Jason mentioned, we’ve been able to pay down more than $3 billion while maintaining nearly the same company size from a revenue standpoint.
Thinking about our markets — and going back a bit — following our large mergers, our previous model had us operating many standalone hospitals, what I call “single dots on a map.” Around the late 2010s, we started to pivot strategically toward building networks of care — markets where we could leverage our scale and footprint, either within a state or a defined region.
This approach allowed us to build out access points across the continuum, from primary care to acute care and into post-acute services. Many of the hospitals we’ve divested didn’t fit into that network-of-care strategy. Refocusing has allowed us to hone in on our core markets, where we have the full continuum of care and can truly leverage our scale.
This is a nuanced point, but it was very intentional. Even in our public filings, we’ve stopped referring to ourselves as a “hospital company.” We now call ourselves a “healthcare company” because we’re delivering services across the full continuum — from primary care clinics and ambulatory surgery centers to imaging centers and, of course, hospitals. We build these networks of care around an acute care hospital, but they also include behavioral health, skilled nursing facilities and inpatient rehab. It’s truly a broad continuum of care.
Q: With a portfolio of 70 hospitals and over 1,000 care sites, how do you define a “core” market today? How are you thinking about growth and portfolio optimization moving forward?
KH: Our model is a multi-pronged approach, still centered on the acute care hospital as the anchor in our markets. Some of our peer companies have taken a different path — moving individually into areas like surgery centers, in some cases even competing with their own hospitals or operating in markets without an acute care presence.
We’re continuing to pursue a strategy where the acute care hospital is the hub, and we’re building a network of care around it — adding service lines that support and extend the hospital’s role within the market.
JJ: I’d also add that, at a macro level, our strategy varies by market depending on local needs. One market might benefit from a freestanding emergency department, while another might need an ambulatory surgery center. It really comes down to what best supports that specific community.
Q: Kevin, CHS, like much of the industry, is facing clinical workforce challenges. What levers are you pulling to improve team engagement?
KH: People are a key priority for me. We’ve worked to enhance the employee experience, especially during our ERP rollout. We moved many back-office functions, including recruiting, into a shared service environment. That allowed us to recruit nationally rather than just locally, which has helped significantly.
Our footprint across the Southeast and Southwest has also helped, as these are attractive places to live. We’ve enhanced benefits — including student loan repayment for nurses — and our turnover has improved over the past couple of years, although there’s still work to do.
Q: After the systemwide ERP implementation, how is CHS’ finance team using better data and systems now to drive operational decision-making? Are there any specific examples you can point to?
JJ: We implemented our cloud-based ERP with Oracle on schedule, with full deployment completed Jan. 1 of this year, which we’re proud of. It was a significant undertaking. We also developed a shared business operations model for several back-office functions, which is key to unlocking savings.
We’re now on a single application for finance, supply chain, human capital, HR and payroll, and we’ve standardized many processes across these areas. The focus now is on maturing and optimizing both our use of Oracle and our shared operations model.
For example, in finance, we can now build dashboards for executives and managers to drill into key metrics and better understand expense drivers. On the supply chain side, the system helps ensure we’re purchasing on contract and analyzing which medical supplies are most appropriate — enabling more bulk buying and systemwide negotiations.
In human capital, we’re exploring smarter scheduling, including the use of AI to predict staffing peaks and valleys. Oracle is investing heavily in AI, and we now have the opportunity to take advantage of those tools as they’re rolled out.
I mentioned our shared business operations earlier, and tying that back to the question about workforce challenges, we’ve also built a centralized recruiting team. That team is now focused on meeting the specific hiring needs at each hospital, which has been a fantastic addition.
KH: One specific area I’ll call out is the financial statement closing process. Jason and his team have shortened that by about 10%, which means we’re closing the books faster each month. That’s a recurring benefit, and they’re close to taking out another 10% from the process.
It frees up staff time for other work, reduces the effort required to close the books and, most importantly, gets information into operators’ hands much more quickly. That enables more timely decision-making.
The decision support benefits of the ERP extend beyond just month-end close. Day to day, having faster access to information is a major advantage. It allows leaders to act on current data, rather than waiting on historical reports — and that will lead to greater financial benefit over time.
Q: Technology and innovation continue to reshape care delivery. Where are you seeing the biggest opportunities to use digital tools, automation, or AI to drive performance or improve patient care?
KH: Oracle is providing a lot of value. There’s so much embedded in their tools, but we’re also investing in technology beyond that. We’re partnering with a company to use wearable remote patient monitoring devices, and we now have more than 20,000 patients using them. We believe this enhances care. We’ve also invested in technologies aimed at improving patient safety in a few areas, and we’re already seeing benefits.
We’re actively piloting new tools and expanding the use of AI, including in appointment scheduling to improve patient access. Automation and AI are evolving rapidly. A few years ago, we focused more on internal development, but that’s shifting. We’re now seeing more innovation coming from external vendors — with proven use cases — and many of our existing software providers, including Oracle, are embedding AI into the tools we already use.
That brings additional value: As we receive updates to these platforms, they increasingly include enhanced AI features.
We also expect to see major benefits from Oracle’s acquisition of Cerner. We’re a significant user of Cerner’s EHR system on the clinical side, and as Oracle continues developing its health products, we’re rolling them out deeper into our organization. Over time, we expect to uniquely benefit from connecting our business and clinical systems through a single, integrated platform.
Q: As a CEO-CFO team, how do the two of you align on big decisions?
JJ: I’ve been at CHS for 13 years and worked for Kevin the entire time. But I’ve known him for 25 years — I started at Deloitte, and CHS was my client. Kevin was vice president of financial reporting then. I worked through the IPO with him. We’ve always worked closely and are naturally aligned.
KH: In addition to knowing and working together for so long, there’s a lot of trust and mutual respect between us. That trust allows us to work through big decisions, and I feel fortunate to have such a strong team around us.
As I step into this role, I see part of my responsibility as helping our other leaders be successful. We have such talented people here. My job is to allocate resources wisely and rely on their expertise.
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