Community Health Systems reported a net loss in the first quarter as the COVID-19 pandemic continued to dent admissions, the hospital chain announced late Wednesday.
The Franklin, Tenn.-based system reported a net loss attributable to shareholders of $64 million on operating revenue of $3.01 billion for the quarter ended March 31, down from a net income attributable to shareholders of $18 million on operating revenue of $3.03 billion from the prior-year period. That was, in part, due to a 7.2% decline in same-store adjusted admissions year over year.
"In the first part of the quarter, COVID surges continued to impact volume in many markets," CHS CEO Tim Hingtgen said on an earnings call. But volumes improved by March, he added.
While admissions were down on the quarter, CHS benefited from higher-acuity patients as net revenue per adjusted admission increased 18.3% on a same-store basis. That trend, coupled with a higher than expected commercial payer mix, boosted many large systems' balance sheets in the second half of 2020.
CHS aims to retain those higher-acuity procedures through its continued investment in its proprietary transfer center and centralized scheduling solution, Hingtgen said. CHS has added 300 beds and 50 surgical and procedural suites over the past three years to that end, he said, noting that more primary-care and specialty clinics, ambulatory surgery centers and urgent care centers are on the way.
"We don't want to see the higher-acuity business slip away," Hingtgen said.
Executives expect COVID-related supply chain and labor costs to decline as COVID-19 cases wane. They are planning on quarter-over-quarter revenue gains as deferred elective procedures resume, particularly the well-reimbursed total joint replacements and spinal surgeries.
CHS ended 2020 with $511 million in net income attributable to shareholders as it finished its multi-year effort to sell underperforming hospitals, divesting five hospitals so far this year. But the company will continue to hear pitches from potential buyers of certain hospitals, executives noted.
The hospital chain's current portfolio of relatively larger hospitals in bigger markets where population and employment rates are growing will improve its bargaining leverage, executives said.
Its $3.01 billion in first-quarter revenue exceeded analyst estimates by $50 million.
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