Tennessee-based Community Health Systems (CHS) signaled it will continue to downsize after announcing a loss of $133 million for 2023 in its earnings call last week.
“Proceeds from divestiture transactions enable a variety of positive activities such as targeted investments in core markets, funding potential future acquisitions and increased flexibility in debt management,” said CHS CEO Tim Hingtgen during the call. “We are currently evaluating inbound interest for a handful of markets that could yield more than $1 billion in additional proceeds.”
CHS was one of the largest hospital systems in the country, operating around 200 hospitals in 2014, but the site count is less than 80 today as the for-profit network has been on a selling spree in recent years.
Despite these divestitures, the company reported some positive trends. Operating revenues grew 1.2% year-over-year in the fourth quarter of last year. The provider also saw a 5.3% uptick in patient admissions, while company execs touted their strategic emphasis on outpatient services, which now account for a significant portion of their revenue.
“As a result, CHS health systems are capturing patient care that is migrating out of the inpatient environment with 54% of our net revenues now derived from outpatient care,“ Hingtgen said.
The move to sell more facilities is part of a broader trend as providers reassess their portfolios in light of financial pressures and changing patient care models.
“Inpatient and outpatient volumes in the fourth quarter increased for both the commercial and Medicare books, reflecting the strong demand in our markets and targeted capital investments,” CFO Kevin Hammons said. “However, the mix of that business with the disproportionate growth in Medicare Advantage versus fee-for-service and from states where our negotiated commercial rates are lower, continued to affect our net revenue per adjusted admission growth, similar to previous quarters.
Evan joined TriMed in 2011, writing primarily for Health Imaging. Prior to diving into medical journalism, Evan worked for the Nine Network of Public Media in St. Louis. He also has worked in public relations and education. Evan studied journalism at the University of Missouri, with an emphasis on broadcast media.