Becker's Hospital Review

8 CFO / FINANCE CHS slashes net loss by $308M, plans to sell more hospitals By Ayla Ellison F ranklin, Tenn.-based Community Health Systems, which operates 102 hospitals in 18 states, narrowed its net loss in the third quarter of 2019. CHS reported a decline in revenues and admissions in the third quarter of 2019. e company said admissions decreased 9.2 percent year over year and operating reve- nues dropped 5.9 percent to $3.2 billion. However, admis- sions were up 2.4 percent in the third quarter of 2019 on a same-facility basis. Aer factoring in operating expenses and one-time charges, CHS ended the third quarter of 2019 with a net loss attrib- utable to stockholders of $17 million. at's compared to the third quarter of 2018, when the company recorded a net loss of $325 million. Looking at results for the first nine months of 2019, CHS reported a net loss of $302 million on revenues of $9.9 bil- lion. e company recorded a net loss of $460 million on revenues of $10.7 billion in the first three quarters of 2018. CHS Chairman and CEO Wayne T. Smith said he expects the company's performance to continue to improve in the fourth quarter and in 2020. "We delivered a strong same-store performance across key metrics during the third quarter. Continued execution of our transfer program, accountable care organizations, capital investments, and strategic plans have driven these improved results," he said in the earnings release. "We believe these in- vestments, along with recent divestitures and ongoing oper- ating efficiency initiatives, have positioned the company for continued improved performance. As we move forward, we expect a good finish to [2019] and believe we are well-posi- tioned to deliver a strong performance in 2020." CHS announced in late 2017 that it intends to sell a group of hospitals with combined revenue of $2 billion, and the company has made progress toward that goal in 2019. As of Oct. 1, 2019 CHS had completed the divestiture of 12 hospitals. e company has three other hospitals under definitive agreement to sell. "e company intends to continue its portfolio rationaliza- tion strategy during the remainder of 2019 and is pursuing additional interests for sale transactions, which are current- ly in various stages of negotiation with potential buyers," the earnings release stated. e hospital divestitures have helped CHS reduce its debt load. e company carried $13.88 billion in long-term debt when it announced its divestiture plan at the end of 2017. CHS' long-term debt totaled $13.29 billion as of Sept. 30. Shares of CHS closed Oct. 29 at $4.58 per share, down from $4.60 the day prior. n Kaiser can't stop Hawaii health system from balance billing By Ayla Ellison A federal court has dismissed a lawsuit Kaiser Foundation Health Plan filed against Honolulu-based Queen's Health Systems after a contract between the parties expired May 30, according to The Honolulu Star-Advertiser. Queen's Health Systems, which includes four hospitals, provides emergency services to hundreds of Kaiser members each year. After the contract expired, and the parties were unable to reach a new agreement, Kaiser said it would pay the "reasonable value of Queen's emergency services," but "not necessarily 100 percent of billed charges," according to the report. In response, QHS said Kaiser members would be billed for the bal- ance of charges not paid by Kaiser. Kaiser subsequently sued to pre- vent the billing practice and QHS asked the court to dismiss the suit. In dismissing the lawsuit with prejudice Oct. 31, Judge Derrick Watson, a U.S. District judge in Hawaii, said there are "no real win- ners," according to the report. "Should QMC [Queen's Medical Center] choose to balance bill Kaiser's members for emergency services, QMC is unlikely to receive glowing attention from interested observers. In terms of dollars and cents, eventually someone or some entity will need to pay (or be ordered to pay) for the services QMC has rendered to Kaiser's members." Kaiser told The Honolulu Star-Advertiser in early November that it intends to appeal the court's ruling. n Glassdoor chief economist: Healthcare largest, healthiest sector in economy By Morgan Haefner A s the U.S. population ages and more people require health- care for longer periods of time, healthcare will remain an "employment powerhouse," according to CNN Business. Despite outside threats like a recession and government regula- tion, "healthcare is by far the largest and healthiest sector of the economy," Andrew Chamberlain, PhD, chief economist at Glass- door, told CNN Business. One reason healthcare will ride out economic and regulatory threats is continued demand for care when people get sick. Even as Democratic presidential candidates campaign on overhauling America's healthcare system, structural changes won't stop elderly and sick people from needing healthcare services, according to CNN Business. Other industries don't have this kind of demand and won't be able to weather recession or government changes as well, experts said. n

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