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Community Health Systems cites weak volume for poor results


By Beth Kutscher
Posted: February 18, 2014 - 6:45 pm ET
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Community Health Systems, Franklin, Tenn., saw another tough quarter during the last three months of 2013 as same-facility admissions fell 10.5% and 6.7% when adjusted for outpatient activity.

Income from continuing operations fell to $52.3 million on $3.2 billion in revenue, compared with $85.6 million in income on $3.3 billion in revenue during the same period in 2012.

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Community offered a preview of its results last month ahead of completing its $3.9 billion acquisition of Health Management Associates. The deal adds 71 HMA hospitals, but Community will need to divest two of its own in Alabama and South Carolina under an agreement with the Federal Trade Commission.

In addition to weak volume, Community cited higher bad debt and a more adverse payer mix for bringing down the results. As the chain integrates HMA, the combined company will also focus on cutting costs and eliminating overlaps in their operations.

For the full year, Community reported $217.3 million in income, a 37.3% decrease, on nearly flat revenue of $13 billion. Same-facility admissions declined 7.2%, or 4.6% when adjusted for outpatient activity.

The company's results included a $101.5 million reserve put aside for a settlement with the government to resolve an investigation of its short-stay admissions practices, as well as $14.1 million in expenses related to the HMA deal.

Follow Beth Kutscher on Twitter: @MHbkutscher


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