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CHS' Declining Patient Volumes Due to COVID Decreased Net Operating Revenues

Analysis  |  By Jack O'Brien  
   February 17, 2021

By the end of 2020, CHS had received just over $705 million in payments through the Public Health and Social Services Emergency Fund.

Community Health Systems, Inc. (CHS) experienced patient volume declines due to the COVID-19 pandemic which decreased net operating revenues in 2020, according to the company's latest earnings report released Wednesday afternoon.

For the full year, CHS reported net operating revenues of nearly $11.8 billion, a 10.8% year-over-year decrease. The company did see its net income attributable to common stockholders rise to $511 million from a $675 million loss in 2019.

The company's admissions fell 15.7% in 2020 and adjusted admissions dropped 19.4%, while admissions decreased 8% on a same-store basis.

CHS also recorded an adjusted EBITDA of $1.8 billion for the full year, up from the $1.6 billion adjusted EBITDA in 2019. 

Related: CHS Announces CEO Transition, Releases Q3 Earnings Report

By the end of 2020, CHS had received just over $705 million in payments through the Public Health and Social Services Emergency Fund.

C-suite perspective:

"Throughout the COVID-19 pandemic, I have been incredibly proud of everyone across our entire organization," Tim L. Hingtgen, CEO of CHS, said in a statement. "Our caregivers and medical staffs have ensured that their communities have access to essential, high-quality health services. Our management teams have adapted to constantly changing dynamics and effectively executed our cost management efforts. As a result, we ended the year with strong financial results, momentum around our key strategic initiatives, and optimism about the future of our Company. We look forward to what lies ahead, as we believe we are well-positioned for growth and long-term success that will deliver value for all of our stakeholders."

On Tuesday, CHS' board of directors elected Kevin Hammon, who previously served as executive vice president and CFO, to serve as president and CFO of the company.

CHS continued its selloff of hospitals throughout 2020, finishing the year with 13 divestitures.

For the final quarter of 2020, CHS recorded net operating revenues of $3.1 billion, a net income of $311 million, and an adjusted EBITDA of $614 million.

The organization experienced a 12.9% decrease in admissions and a 17.8% decrease in adjusted admissions. On a same-store basis, admissions fell 3.4% while adjusted admissions slipped 9.5%.

Pointing to recovering patient volumes, net operating revenues on a same-store basis increased 4.5% during Q4 2020.

Additionally, CHS extinguished $787 million principal value of outstanding notes for cash payments of $478 million and 10 million newly issued shares of company stock, according to a press release.

Related: Tenet Records $414M Net Income in Q4

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

Editor's note: This story has been updated to include Kevin Hammon's appointment as president and CFO of the company.

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

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