By MATT BLOIS
The Franklin hospital chain Community Health Systems reported a big loss during the first quarter of 2019, but the company plans to keep selling less profitable hospitals in an effort to turn around.
Community Health Systems reported a net loss of about $118 million in the first three months of 2019. In the beginning of 2018, the company only reported a net loss of $25 million. CHS reported its financial results on Tuesday afternoon.
The company reported $3.4 billion in operating revenue. That’s about an 8% decrease compared to the same period last year, when the company earned $3.7 billion in operating revenue.
In part, the loss was due to a decrease in patients. The hospital chain has been selling off unprofitable hospitals. That means fewer patients overall walking through the doors. CHS sold 30 hospitals in 2017 and 13 hospitals in 2018.
“This has allowed the company to shift more of our resources to more sustainable markets, ones with better population growth, better economic growth and lower unemployment,” CEO Wayne Smith said on a conference call with investors Wednesday morning.
CHS reported a 13% decrease in total admissions, compared to the same period in 2018.
However, admissions to the current portfolio of hospitals stayed basically flat compared to last year. The company also reported that revenue at the current portfolio of hospitals increased by about 3% compared to the beginning of 2018.
COO Tim Hingtgen said on a conference call that the company is seeing some signs that admissions to the current hospital portfolio will continue to grow.
According to a press release, CEO Wayne Smith said the admission numbers at the current hospitals are an incremental improvement.
“We believe our recent investments, including physician recruitment, employment and alignment strategies, and the development of new access points, will drive continued improvement in our performance moving forward,” he said, according to the press release. “We remain focused on all aspects of operational excellence, with a high priority on the efficient use of our resources, diligent efforts to continuously improve processes and results, and consistent execution of our growth initiatives.”
In the first three months of 2019, CHS closed three hospitals and sold four more. It also has a definitive agreement to sell one more in Tennessee. The company reported in a press release that it plans to continue selling off hospitals going forward.
CHS has received interest from some interested buyers, and the company is in negotiations with several potential buyers. The company cautioned that those sales aren’t finalized though.