Community Health Systems (CHS) is in the red for the third time this year.
Despite rising patient admissions and efforts to control labor expenses, CHS took a net loss of $91 million in its third quarter 2023 results.
Recent data shows hospitals are seeing some financial relief as revenue increases offset rising expenses and operating margins stabilize, but the same is not ringing true for CHS. The system missed Wall Street expectations for earnings per share despite its wins in increasing admissions and controlled labor expenses.
Why the continued losses this year? CHS has been plagued with reimbursement challenges, inflationary pressures, regulatory hurdles, and evolving consumer behaviors CHS CEO Tim Hingtgen said during its investors call.
Moving into the next quarter and beyond, Hingtgen said CHS plans to focus on its expansion projects, strengthening its workforce, and controlling expenses to get its numbers back in the black.
Here are several other key takeaways from CHS’ third quarter:
Revenue growth: CHS reported net operating revenues of $3.086 billion for the third quarter of 2023, reflecting a 2.0 percent increase compared to the same period in 2022. Net operating revenues increased by 5.1 percent, CHS said.
Volume growth: CHS experienced strong volume growth in admissions, adjusted admissions, ER visits, and clinic appointments during the third quarter. CHS says this growth is attributed to investments in service lines, physician recruitment, and capacity optimization programs.
Losses and adjusted EBITDA: CHS saw a net loss attributable to CHS stockholders of $91 million for the third quarter, compared to $42 million for the same period in 2022. However, when excluding specific adjusting items, the loss improved from $0.52 per share (diluted) in 2022 to $0.33 per share (diluted) in 2023. CHS’ adjusted EBITDA was $360 million, the report says.
Cash flow: Net cash provided by operating activities decreased to $29 million for the third quarter of 2023, compared to $137 million for the same period in 2022.
Amanda Norris is the Associate Content Manager of Finance, Payer, Revenue Cycle, and Strategy for HealthLeaders.
CHS topped revenue estimates, but still ended up in the red for the third time this year.
Why? Its CEO says there were several key setbacks for the company.