The health system has already shed 14 of the 38 hospitals it had when it formed less than four years ago.
Quorum Health, based in Brentwood, Tennessee, had 38 hospitals when it a spun off from Community Health Systems (CHS) in spring 2016, but the for-profit chain could have as few as 20 hospitals left by the time it turns four years old.
President and CEO Bob Fish told analysts and investors this month that Quorum, which has already closed two of its hospitals and sold 12 others, is working on up to four more hospital divestitures that could close by the end of 2020's first quarter, as the Nashville Post's Geert De Lombaerde reported.
The comments came after Quorum reported a $75.9 million third-quarter loss, significantly deeper than the company's $16.9 million second-quarter loss and $39.0 million first-quarter loss.
Quorum reported a $200.2 million net loss for 2018 and a $114.2 million loss for 2017.
Once it became clear that the Quorum spin-off was severely underperforming expectations, investors began asking pointed questions. Quorum's leaders formally responded to those investors with a letter in 2017 that acknowledged several reasons to question the "operational competence" of CHS leaders who backed the spin-off.
Quorum's former president and CEO, Thomas D. Miller, retired suddenly in 2018, and a dispute over contracts between Quorum and CHS ended in arbitration earlier this year.
Quorum shares had been trading for more than $3 apiece at the beginning of 2019, but that price has fallen by about 80% this year, to $0.76 when markets closed Monday.
Moody's Investors Service downgraded Quorum's ratings Tuesday, with a negative outlook. The downgrade "reflects growing uncertainty as to whether Quorum's divestiture plan will be completed in the months ahead and when
the company's earnings will rebound," Moody's said.
Any earnings improvement will depend heavily on both the divestitures and Quorum's efforts to improve its revenue cycle management, the ratings agency said.
Related: Has Community Health Systems Finally Bottomed Out?
Editor's note: This story was updated Tuesday afternoon with information from Moody's Investors Service.
Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.
KEY TAKEAWAYS
Investors have questioned the wisdom of Quorum's spin-off from Community Health Systems.
Quorum's stock price has tanked as has been losing hundreds of millions of dollars.