Pandemic pressures and a high debt load are among the factors stalling Franklin, Tenn.-based Community Health Systems’ financial turnaround, Bloomberg Law report June 8.
CHS, an 83-hospital system, is facing many of the same challenges as other health systems across the U.S., including a surge in labor expenses in the first quarter of this year. The higher expenses and a COVID-19 surge that negatively impacted operating revenues dragged down the company’s earnings in the first quarter of this year. CHS ended the first three months of 2022 with a net loss of $1 million.
CHS leaders expect some of the pressures to continue through the second quarter.
“Moving through the second quarter and the remainder of the year, we anticipate contract labor rates to remain elevated, however, we expect our operational momentum to continue, as we anticipate capturing deferred healthcare demand, benefitting from recent strategic investments, and continuing the execution of the company’s margin improvement program,” Tim Hingtgen, CEO of CHS, said in an April 27 earnings release.
The company cut its earnings forecast in April when it released results for the first quarter, and it has seen its bonds and stock slide since March, according to Bloomberg Law.
Shares of CHS closed June 8 at $5.16, down from $5.25 the day before.