Becker's Hospital Review

10 CFO / FINANCE CHS Records $199M Net Loss, Says Divestiture Spree is Over By Ayla Ellison F ranklin, Tenn.-based Community Health Systems posted a net loss of $199 million in the first quarter of 2017 aer recording net income of $11 million in the same period of the year prior. CHS said revenues dipped to $4.49 billion in the first quarter of this year, down from $4.99 billion in the same period of 2016. e decrease in rev- enue was attributable, in part, to lower patient volume. On a same-facility basis, admissions were down 1.5 percent in the first quarter of this year. When adjusted for outpatient activity, ad- missions decreased 1.4 percent year over year. Although CHS kept operating expenses in check in the first quarter, one-time charges took a toll on the company's bottom line. CHS said its first-quarter financial results included $250 million in impairment charges and loss- es related to the sale of some of its hospitals. Commenting on the company's financial results, CHS Chairman and CEO Wayne T. Smith said, "We are focused on performance improvements that we believe will yield additional efficiencies as we move through 2017. At the same time, we are making progress with our portfolio rational- ization strategy as we work to create a stronger, more sustainable company for the future and further reduce our debt." To improve its finances and reduce its nearly $15 billion debt load, CHS put a turnaround plan into place last year. As part of the plan, the company is selling off 30 hospitals. CHS on May 1 completed its sale of eight hos- pitals to Boston-based Steward Health Care and divested two hospitals to Clinton, Tenn.- based Curae Health. With these transactions completed, CHS no longer operates any hospitals in Ohio, while it continues to operate 21 hospitals in Florida and 15 in Pennsylvania. Twelve other transactions are under defini- tive agreement and seven are under letter of intent, Mr. Smith said on a first quarter earn- ings call May 2. "We're about finished with our divestiture process, this 30 just about lines it up," said Mr. Smith. "ere may be one or two more, but we are not specifically thinking about doing anything significant for the rest of the year." n LifePoint Eyes New Acquisitions as Profit Rises By Ayla Ellison B rentwood, Tenn.-based LifePoint Health is looking to acquire hospitals after a "natural pause" of more than year since buying a new facility, said LifePoint Chairman and CEO Bill Carpenter on a first quarter earnings call with investors April 28. LifePoint saw its financial picture improve in the first quarter of this year. The for-profit hospital operator recorded net income of $64 million on revenues of $1.63 billion in the first quarter of 2017, up from a net income of $23.9 million on revenues of $1.58 billion in the same period of the year prior. The financial boost was attributable to several factors, including an increase in equivalent admission volumes and higher reimburse- ment rates from commercial payers, said LifePoint Executive Vice President and CFO Mike Coggin during the call with investors. With its strong financial results in the first quarter, LifePoint is con- sidering taking over additional hospitals. "We believe we have opportunities for growth in each of our exist- ing markets by adding profitable service lines and recruiting phy- sicians," said Mr. Carpenter during the earnings call. "Additionally, if we identify an acquisition that makes compelling, strategic and financial sense, we have the financial flexibility to take advantage of it and maintain a strong balance sheet." Mr. Carpenter said there is a pipeline of hospitals LifePoint is an- alyzing as potential acquisition targets. The company's strategy is to bring any acquired hospitals from single-digit to double-digit margins within the first three years. n Family Pays 35-Year-Old Hospital Bill by Selling Jewelry Collection By Morgan Haefner C hildren's Hospital of Orange (Calif.) County re- ceived reimbursement for a bill from nearly four decades ago after a family sold their jewelry collection to pay the $10,000 tab, The Orange County Register reports. The jewelry collection belonged to Josefina Sal- daña-Gaffoglio, who unexpectedly passed away from a stroke in January. Ms. Saldaña-Gaffoglio had a long- time wish to use her jewelry to pay a waived hospital bill for treatment her son, Eric Gaffoglio, received in 1982. Mr. Gaffoglio suffered a collapsed lung after his birth at Newport Beach, Calif.-based Hoag Hospital, and was transferred to CHOC. He spent three days at CHOC and racked up a $10,000 bill, according to the report. At the time, Ms. Gaffoglio and her husband could not afford the bill, and CHOC waived it. Following her death, Ms. Saldaña-Gaffoglio's son and daughter-in-law acted on her wishes and gathered about 50 pieces of her jewelry to sell and give to CHOC. They presented a check to the hospital on April 12. "It's what she wanted," Mr. Gaffoglio told two nurses, who were both in the neonatal intensive care unit when he was an infant. "That was her wish. When she died it was our responsibility to take care of [the bill]." n

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