The Brentwood, Tennessee-based hospital operator saw operating revenues slide while adjusted EBITDA rose.
Quorum Health Corporation reported net operating revenues of $442 million in Q1, down $44 million year-over-year, though its adjusted EBITDA rose to $20.6 million, according to its latest earnings report released Friday morning.
Among other important financial metrics, Quorum posted $8.1 million in cash flows from operating activities, one year after recording negative cash flows of $2.6 million, and slashing its quarterly net loss from $99 million to $39 million.
The Brentwood, Tennessee-based hospital operator did experience a $16 million drop in same-facility net operating revenues, down to $445 million for Q1.
Earlier this week, Quorum also announced that it had selected R1 RCM to handle its revenue cycle operations for 26 hospitals and outpatient centers.
"During the first quarter, our team continued to execute on several key strategic goals," Robert Fish, CEO of Quorum Health, said in a statement. "We made meaningful progress on our cost management efforts, achieved an important milestone through the establishment of our partnership with R1 RCM for revenue cycle management services and significantly expanded our divestiture efforts. While seasonally soft volumes, as well as certain market specific circumstances dampened our results, this trend has abated and appears confined to the first quarter. Our continued focus on cost management and the revenue cycle improvements from our new R1 partnership give me confidence that we will meet or exceed our previously stated 2019 goals."
The Q1 results mark a change of pace for the hospital operator, which spun off from Community Health Systems three years ago and dealt with the retirement of CEO Thomas D. Miller last year.
Just like its same-facility operating revenues, Quorum's same-facility surgeries fell in Q1, hampered by "weak outpatient demand." According to Quorum's earnings report, 68% of surgery volume declines were concentrated at four facilities and "related to independent physician turnover."
However, Quorum said the company has seen surgery volumes recover since the end of quarter compared to this time last year.
ADDITIONAL Quorum Q1 EARNINGS REPORT HIGHLIGHTS:
- The company reiterated its financial outlook for the rest of 2019.
- Quorum expects its R1 deal to achieve $5 million in cost savings and $5 million in improved net revenues for 2019.
- The annual impact of the agreement is expected to balloon to $50 million by 2021.
For complete financial information, review Quorum's filing with the Securities and Exchange Commission.
Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.
Metrics that improved: cash flows from operations and adjusted EBITDA.
Metrics that declined: net operating revenues and same-facility surgeries.
CEO Robert Fish said Quorum "made meaningful progress" on its cost management efforts.