Troubled Tennessee Hospital Chain Says It’s On The Way Out Of Rural Areas

https://www.nashvillepublicradio.org/post/troubled-tennessee-hospital-chain-says-it-s-way-out-rural-areas#stream/0

Community Health Systems now owns 118 hospitals in 20 states while divesting facilities in small towns, where hospitals of all kinds have struggled in recent years.

Community Health Systems now owns 118 hospitals in 20 states while divesting facilities in small towns, where hospitals of all kinds have struggled in recent years.

The selling spree is primarily meant to pay down the company’s outsized debt load left over from when Community Health was growing as fast as it could. But the hospital chain was also strategically pulling out of small towns, including several in Tennessee.

CEO Wayne Smith told investors gathered at this week’s annual J.P. Morgan Healthcare Conference in San Francisco that it’s almost entirely left communities with fewer than 50,000 people — once its calling card compared to competing hospital chains.

“So our markets look a lot more like HCA and Universal and Tenet than they did in the past,” Smith said late Wednesday during a company presentation. “We’re no longer a non-urban, or for some of you all a rural, hospital company.”

As it’s repositioned, Community Health’s stock price tumbled to nearly two dollars a share, stoking concern of whether the company could even recover.

The hospital chain has continued to see shrinking admissions and ER visits, but executives assured investors this week they’ve regained their footing.

“Those divestitures have helped us in terms of paying down our debt, improving our margins, improving our cash flow, which you will see more of in 2019,” Smith said.

 

 

 

MARKETS TAKE BIGGEST HIT SINCE FEBRUARY, HEALTH STOCKS SLIDE

https://www.healthleadersmedia.com/finance/markets-take-biggest-hit-february-health-stocks-slide

Healthcare stocks were not immune from Wall Street’s worst day since the period of high volatility earlier this year.

Stocks fell across the board on Wednesday, as Wall Street suffered its worst trading day in more than eight months.

In response to heightened concerns over the Federal Reserve’s recent decision to increase interest rates and rising Treasury bond yields, stocks plunged in all three major trading markets. The Dow Jones Industrial Average fell sharply by 832 points, the S&P 500 dropped by 3.3%, and the Nasdaq slid by more than 4%.

Healthcare stocks suffered in the general market slide, with the Dow Jones U.S. Health Care Index down by 2.46% at the end of trading.

However, among the ‘Big 5’ insurers, Aetna’s slide of 0.15% was the smallest drop. The Hartford, Connecticut-based insurer was boosted by receiving approval Wednesday morning from the Department of Justice on its $69 billion merger with CVS. For its part, the retail pharmacy giant finished the day down 0.72%.

Here’s how the four other major health plans fared:

  • Cigna Corp. finished down 1.9%
  • UnitedHealth Group fell by 2.58%
  • Anthem Inc. ended down 2.34%
  • Humana Inc. fell by 1.82%

Below are how several other healthcare companies finished during Wall Street’s downturn on Wednesday:

  • Tenet Healthcare dropped by 8.43%
  • Centene Corp. dipped by 0.74%
  • Express Scripts Holding Co. fell by 1.69%
  • Teladoc, Inc. dropped by 8.42%
  • Community Health Systems finished down 6.35%
  • HCA Healthcare Inc. slipped by 3.19%
  • Molina Healthcare dropped by 3.52%
  • Magellan Health Inc. fell slightly by 0.61%
  • Athenahealth, Inc. dipped by 2.81%
  • Quorum Health Corp. fell by 6.89%
  • WellCare finished down 2.08%
  • LifePoint dropped slightly by 0.36%
  • Universal Health Services, Inc. slid by 1.36%

 

 

 

 

CHS shares sink to new low

https://www.beckershospitalreview.com/finance/chs-shares-sink-to-new-low-100518.html

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Shares of Franklin, Tenn.-based Community Health Systems closed Oct. 4 at $2.67, their lowest closing price ever and down 1.1 percent from the day prior.
The hospital chain’s stock price traded as low as $2.62 on Oct. 4 after closing Oct. 3 at $2.70 per share. Over the past year, CHS shares have traded between $2.62 and $7.62.

CHS saw its net loss shrink in the second quarter of 2018 as the company continued to refine its hospital portfolio. The company is using proceeds from the hospital divestitures to pay down its debt load.

 

Investors Cash Out of HCA Healthcare as Stock Soars to Record

https://www.bloomberg.com/news/articles/2018-08-14/investors-cash-out-of-hca-healthcare-as-stock-soars-to-record

Long-term shareholders were cashing out of HCA Healthcare Inc. in the second quarter, as the stock rallied to record highs in late June — levels since eclipsed by bigger gains this quarter.

Hedge funds Glenview Capital Management, Highfields Capital Management, Wellington Management Group, Magellan Asset Management and Harris Associates cut their stakes in the hospital chain, which saw its shares rise 17 percent in the first half and an additional 27 percent so far this quarter. The investment firms sold a combined 17.3 million shares, according to their latest 13F filings.

After being under pressure for nearly two years, hospitals have staged a comeback in 2018, outperforming most of their health-care peers with a 21 percent gain. The rally was led by Tenet Healthcare Corp., which has more than doubled, and HCA, which saw earnings and patient visits improve. HCA was also among hospitals uniquely benefiting from the U.S. corporate tax overhaul.

 

Shares of CHS continue to slide

https://www.beckershospitalreview.com/finance/shares-of-chs-continue-to-slide.html

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Shares of Franklin, Tenn.-based Community Health Systems closed July 3 at $3.06, their lowest closing price ever and down 2.2 percent from the day prior.

The 119-hospital chain’s stock price traded as low as $2.82 on July 3 after closing July 2 at $3.13 per share. CHS’ shares have lost 34 percent of their value since hitting $4.64 on June 20, according to Seeking Alpha.

CHS’ share price began sinking June 29 after the company priced a new offering of approximately $1.03 billion of senior secured notes after markets closed June 28. The company intends to use the proceeds to pay off about $1.01 billion in outstanding term loans and related expenses.

 

 

CHS beats expectations with cost cuts despite volume slump

https://www.healthcaredive.com/news/chs-beats-expectations-with-cost-cuts-despite-volume-slump/522579/

Dive Brief:

  • Community Health Systems beat Wall Street expectations Tuesday when it reported a small adjusted net profit during the first quarter, as its cost cutting helped offset weak admissions volume. Its net loss narrowed to $25 million, compared to a net loss of $199 million in the year earlier period.
  • Net operating revenues dropped nearly 18% to $3.69 billion, compared with $4.49 billion for the same period in 2017. The health system continues to struggle with declining admissions, reporting a 2.4% decrease for the quarter.
  • CHS sold off 30 hospitals last year and continues its divestment strategy this year.

Dive Insight:

The Brentwood, Tennessee-based hospital operator is hoping to pare down its outsized debt, much of which was acquired when the company bought the financially-distressed Florida-based system Health Management Associates for $7.6 billion in 2014.

In January, CEO Wayne Smith told investors his goal is to slim down to 100 hospitals in “significantly improved markets.” The company is attempting to make $1.3 billion off of divestitures this year, counting six pending divestitures this year in Florida, Louisiana and Tennessee.

The strategy might be paying off. With 30 fewer hospitals, the company’s inpatient and outpatient revenues for Q1 each increased 0.1% on a same-store basis, and income from operations skyrocketed 198% to $212 million, compared to $71 million in 2017.

Jefferies noted the system offset lower volumes by keeping labor and staffing costs low.

Still, it said future growth “hinge[s] largely on seeing a stabilization in organic volume trends, which has eluded the company for eight consecutive quarters.”

The analysts said new initiatives like an accountable care organization were promising, “though their benefits will likely take a few quarters to materialize.”

Last year, ASL Strategic Value Fund sent a letter to CHS’ board of directors saying “it is time” to replace the CEO. The letter, dated Aug. 8, argued that action is needed immediately as management’s “previous missteps have resulted in billions of dollars of shareholder losses.”

In a comment issued with the earnings report, Smith argued to investors that the company’s turnaround strategy is beginning to work.

“We achieved continued progress across a number of our strategic and operating initiatives,” he said. “During the first few months of the year, we expanded our transfer and access program, launched Accountable Care Organizations, and invested in both outpatient capabilities and service line enhancements across our markets. These efforts helped drive a good financial performance during the first quarter and position the Company for further anticipated improvements during the balance of 2018.”

However, CHS still has a long way to go. The company recently brought in financial advisors to help restructure $13.8 billion in long-term debt.

 

Tenet eliminates poison pill, adopts governance changes

https://www.beckershospitalreview.com/finance/tenet-eliminates-poison-pill-adopts-governance-changes.html

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Dallas-based Tenet Healthcare announced March 5 that its board of directors has approved several changes to the company’s corporate governance.

Here are five things to know about the changes.

1. The board approved changes to Tenet’s bylaws that allow shareholders with a 25 percent stake in the company to request a special meeting. The move comes after the board approved amendments to the company’s bylaws in January that allowed majority shareholders to request special meetings.

2. Tenet approved a short-term shareholder rights plan in August 2017, which was designed to protect $1.7 billion in net operating loss carryforwards and ensure the board could protect all shareholder interests as it executed CEO and board changes. Under the poison pill, if any person or entity acquired 4.9 percent or more of Tenet stock, all holders of rights issued under the plan are entitled to acquire shares of common stock with a 50 percent discount.

3. Tenet terminated the poison pill March 5. “The board made this decision based upon the reduced value of the NOL shareholder rights plan following recent tax law changes and an increase in the company’s stock price since the NOL shareholder rights plan was adopted, as well as shareholder feedback,” Tenet said in a statement. The poison pill was originally slated to expire following Tenet’s 2018 annual meeting of stockholders, which is typically held in May.

4. Tenet announced March 5 that it also eliminated the executive committee as a standing committee of the company’s board of directors.

5. “The board of directors and management have spent considerable time in recent weeks engaging with shareholders representing a majority of our outstanding stock and we received constructive input regarding Tenet and our objective to lead with best corporate governance practices,” said Ronald A. Rittenmeyer, executive chairman and CEO of Tenet. “We believe the actions which we are taking today demonstrate our continued commitment to being responsive in a timely manner to shareholder feedback and to implementing measures that increase transparency and accountability.”