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CHS Announces CEO Transition, Releases Q3 Earnings Report

Analysis  |  By Jack O'Brien  
   October 27, 2020

Longtime CEO Wayne T. Smith will transition to Executive Chairman in January 2021 and will be replaced by COO Tim Hingtgen.

Community Health Systems, Inc. (CHS) announced Tuesday afternoon that longtime CEO Wayne T. Smith will transition to Executive Chairman in January 2021 and will be replaced by COO Tim Hingtgen.

Smith, who has served as CEO of the Franklin, Tennessee–based for-profit hospital operator since 1997, said in a statement that his tenure was "a privilege, an honor, and truly one of the greatest experiences of my life."

"Over more than two decades, my confidence in this Company has never wavered," Smith said. "Our commitment to caring for patients and providing value for our communities has always come first – no matter the challenges – and we are proud that we have made a positive difference in the lives of millions of people. I have been fortunate, and I am very grateful, to have worked with incredibly smart and dedicated people who want to make healthcare better. I’m optimistic about the future of the Company under Tim’s leadership. He is passionate about quality patient care, and he is committed to strategies that will advance healthcare delivery for years to come. I know Tim will be an effective and outstanding Chief Executive Officer for our company."

Related: Community Health Systems Executives Donate $1.5M to Employee Charity During Pandemic

Hingtgen, who has served as the company's COO since 2016, said in a statement that he looks forward to serving CHS "at the next level of leadership."

"I am honored to work with capable, committed leaders across our organization, to focus my energy on strong collaboration, to support the work of our frontline caregivers, and to promote growth across all of our markets," Hingtgen said. "I am also deeply grateful to Wayne Smith for his leadership of our organization and for the opportunity to work closely with him these past few years. I could not be more appreciative to Wayne and our Board of Directors for their support, confidence and trust."

The leadership change was announced the same day that CHS released its Q3 earnings report, which highlighted the lingering impacts of the COVID-19 pandemic on the business' bottom line.

The company's net operating revenues slid to $3.1 billion, though CHS stated that no Coronavirus Aid, Relief, and Economic Security Act (CARES) Act funds were recognized in Q3.

For the quarter, CHS recorded a net income of $112 million, significant improvement compared to the reported $17 million net loss this time last year. Additionally, CHS' adjusted EBITDA was $431 million, a more than $40 million increase year-over-year.

Related: COVID Impact: CHS' Admissions, Operating Revenues Fall More than 23% in Q2

However, the company still struggled with declining admissions and volume pressures.

Admissions fell 13% during the quarter, while adjusted admissions declined 18%. Similarly, on a same-store basis, admissions dropped 6.2% and adjusted admissions decreased 11.5%.

CHS' earnings were released days after the company completed the previously announced divestitures of San Angelo Community Medical Center to Shannon Health System, as well as Abilene Regional Medical Center and Brownwood Regional Medical Center to Hendrick Health System.

For complete financial information, review CHS' filing with the Securities and Exchange Commission.

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.

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