Tag Archives: Operating Performance

CHS reports $110M net loss, completes 30-hospital divestiture spree

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https://www.beckershospitalreview.com/finance/chs-reports-110m-net-loss-completes-30-hospital-divestiture-spree.html

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Community Health Systems, a 127-hospital chain based in Franklin, Tenn., posted a net loss of $110 million in the third quarter of 2017, compared to a net loss of $79 million in the same period of the year prior.

CHS said revenues dipped to $3.67 billion in the third quarter of this year, down from $4.38 billion in the same period of 2016. The decrease in revenue was attributable, in part, to lower patient volume. On a same-facility basis, admissions were down 14.8 percent in the third quarter of this year. When adjusted for outpatient activity, admissions decreased 15.5 percent year over year.

The company’s financials also took a $40 million hit from hurricanes Harvey and Irma in the three months ended Sept. 30. CHS said the hurricanes caused it to incur additional expenses and miss out on revenues.

Although CHS’ operating expenses declined in the third quarter, one-time charges took a toll on the company’s bottom line. CHS said its third quarter financial results included $33 million in impairment charges and losses related to the sale of some of its hospitals.

To improve its finances and reduce its heavy debt load, CHS put a turnaround plan into place in 2016. As part of the initiative, the company announced plans this year to sell off 30 hospitals. With the sale this week of Highlands Regional Medical Center in Sebring, Fla., and Merit Health Northwest Mississippi in Clarksdale, CHS Chairman and CEO Wayne T. Smith said Wednesday the 30 hospital divestitures are complete.

“Looking forward, we remain focused on strategic initiatives that we believe will yield positive results in the future,” said Mr. Smith. “Our goal is to emerge from this process with a sustainable group of hospitals that are positioned for long-term success and growth.”

CHS brought down its long-term debt load to $13.9 billion in the third quarter of this year, from $14.8 billion in the same period of 2016.

Moody’s assigns ‘Aa3’ rating to MultiCare Health System’s bonds

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https://www.beckershospitalreview.com/finance/moody-s-assigns-aa3-rating-to-multicare-health-system-s-bonds.html

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Moody’s Investors Service assigned its “Aa3” rating to Tacoma, Wash.-based MultiCare Health System’s proposed $318 million series 2017A and 2017B revenue bonds.

Additionally, Moody’s affirmed the “Aa3” rating on MultiCare Health’s parity debt, affecting $847 million of rated debt.

The affirmation and assignment are a result of several factors, including the health system’s strong market position, greater revenue diversity and recent acquisition of two hospitals in Spokane, Wash. Moody’s also acknowledged MultiCare Health’s weaker operating performance in fiscal year 2016 and more than 30 percent increase in debt and risks associated with integrating into the Spokane market.

The outlook was revised to negative from stable, reflecting the health system’s increased debt burden and anticipated decreases in profitability as the health system integrates into a new market.

Fitch affirms ‘A+’ rating on PeaceHealth’s revenue bonds

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https://www.beckershospitalreview.com/finance/fitch-affirms-a-rating-on-peacehealth-s-revenue-bonds.html

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Fitch Ratings affirmed its “A+” rating on Vancouver, Wash.-based PeaceHealth’s outstanding debt, affecting a total of $477 million of debt.

The affirmation is a result of several factors, including PeaceHealth’s strong market position, geographic diversity, favorable liquidity metrics and improved debt service coverage. Fitch also acknowledged the health system’s upcoming capital spending and recovering operating performance following an EMR implementation.

The outlook is stable.

Moody’s assigns ‘A3’ rating to Tower Health’s bonds

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https://www.beckershospitalreview.com/finance/moody-s-assigns-a3-rating-to-tower-health-s-bonds.html

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Moody’s Investors Service assigned its “A3” rating to West Reading, Pa.-based Tower Health’s proposed $584 million series 2017 bonds.

Additionally, Moody’s downgraded Tower Health’s outstanding ratings to “A3” from “A2.”

The assignment is a result of several factors, including Tower Health’s solid market position, historically healthy operating performance and favorable absolute liquidity metrics. Moody’s also acknowledged the increased risk associated with the health system’s recent purchase of five hospitals, which resulted in the downgrade of Tower Health’s outstanding ratings.

The outlook is revised to negative from stable, reflecting the increased risk of integrating five formerly for-profit hospitals into the nonprofit health network.

S&P downgrades Care New England Health System’s rating to ‘BB-‘

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https://www.beckershospitalreview.com/finance/s-p-downgrades-care-new-england-health-system-s-rating-to-bb.html

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S&P Global Ratings downgraded Providence, R.I.-based Care New England Health System’s rating to “BB-” from “BB.”

“The lower rating reflects CNE’s prolonged period of extremely weak financial performance, thin balance sheet metrics, and declining volume trends that portend deeper utilization challenges and competitive threats within its overall service market,” said Jennifer Soule, an S&P Global Ratings credit analyst.

The outlook is negative, reflecting uncertainties regarding CNE’s ability to shore up finances and close Pawtucket, R.I-based Memorial Hospital in a timely manner. In addition, S&P acknowledged CNE’s continued struggle to formalize a partnership with another provider.

Moody’s downgrades Albert Einstein Health Network to ‘Baa3’

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https://www.beckershospitalreview.com/finance/moody-s-downgrades-albert-einstein-health-network-to-baa3.html

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Moody’s Investors Service downgraded Philadelphia- based Albert Einstein Health Network’s bond and issuer rating to “Baa3” from “Baa2,” affecting $447 million of outstanding debt.

The downgrade is a result of several factors, including the health system’s negative operating performance in fiscal year 2017, declining liquidity measures and uncertainty in state funding status. Moody’s also acknowledged the health system’s planned improvement strategies to bolster liquidity metrics.

The outlook is revised to negative from stable, reflecting the health system’s severe operating loss and declining liquidity in fiscal year 2017.

HCA’s net income tumbles to $426M in Q3

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https://www.beckershospitalreview.com/finance/hca-s-net-income-tumbles-to-426m-in-q3.html

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Nashville, Tenn.-based HCA Healthcare, which operates more than 170 hospitals, saw revenue increase in the third quarter of 2017, but the company’s net income declined year over year.

HCA’s financial results were in line with the third quarter preview the company issued in October. HCA ended the third quarter of this year with net income of $426 million on revenues of $10.7 billion. That’s compared to the same period of 2016, when the company recorded net income of $618 million on revenues of $10.3 billion.

On an earnings call Tuesday, HCA Chairman and CEO R. Milton Johnson said the company took an estimated $140 million hit from hurricanes Irma and Harvey. HCA has a total of 18 hospital campuses, eight freestanding emergency rooms, five surgery centers and one freestanding cancer center in the Houston and Corpus Christi, Texas, markets, which were two areas significantly impacted by Hurricane Harvey. The company has 50 hospital campuses, 32 surgery centers, 17 freestanding ERs and 10 diagnostic imaging centers in Florida, where several facilities felt the impact of Hurricane Irma.

The Texas Medicaid Waiver program also took a toll on HCA finances. The company said it took a $50 million hit related to the program in the third quarter of this year.

Mr. Johnson said the hurricanes and the Texas Medicaid waiver reduction make evaluating the third quarter results more complex. “However, if you look at the broad trends to normalize with the destruction in the hurricane affected markets, we believe many of the trends are comparable with the first half of 2017,” he said.

In addition to releasing its third quarter financial results, HCA announced the board approved a new $2 billion share repurchase program. Including this newly announced program and the company’s share repurchase program announced in November 2016, HCA has approximately $2.15 billion authorized for share repurchases.

Tenet Healthcare to slash 1,300 positions to cut $150M in expenses

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Tenet Healthcare, which recently went through a management shakeup amid financial losses, plans to eliminate 1,300 positions in order to cut expenses by $150 million.

The Dallas-based healthcare system announced Friday it had begun an “enterprise-wide cost-reduction imitative that would primarily involve job cuts and renegotiation of contracts with suppliers and vendors.”

The majority of the savings will be through actions within the company’s hospital operations, including eliminating regional managers and streamlining overhead and centralized support functions. Job cuts will also take place within the company’s ambulatory care and Conifer business segments.

In total, the company intends to eliminate 1,300 positions or about 1% of its workforce, including contractors, by the end of 2018.

The announcement comes in the wake of the sudden departure of longtime CEO Trevor Fetter, who last week stepped down from the top post and left earlier than planned with a severance package worth nearly $23 million. Reuters also reports that the organization has scrapped its sale plans and is continuing to explore ways to reduce its $15 billion debt.

The news about the layoffs also included the company’s preliminary financial results for the third quarter of 2017. Tenet expects a net loss of $366 million in the third quarter.

Ronald A. Rittenmeyer, who was recently appointed CEO while the organization searches for Fetter’s permanent replacement, said in the announcement that the organization is moving quickly to improve the financials and return for shareholders. The cost-reduction plans include structural changes in the way the organization operates to improve agility and speed decision-making, he said.

“We believe these changes will help us drive organic growth, expand margins, and better support our hospitals and other facilities in delivering higher levels of quality and patient satisfaction,” he said.

Aetna’s profits rise 39% despite revenue shortfall

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https://www.beckershospitalreview.com/payer-issues/aetna-s-profits-rise-39-despite-revenue-shortfall.html

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Aetna saw revenues dip 5 percent in the third quarter of fiscal year 2017 compared to the year prior, but cost containment allowed the insurer to boost net income.

The insurer reported revenue of $15 billion in the third quarter ended Sept. 30, down from $15.8 billion in the same period a year prior. Aetna cited lower premiums in its healthcare segment, fewer members in its ACA exchange business, and temporary suspension of the health insurer fee as contributors to the decline.

However, tapering expenses offset revenue losses. Aetna witnessed expenses drop 7 percent from $14.7 billion in the third quarter of 2016 to $13.7 billion in the same period this year. The insurer attributed the decline to temporary suspension of the health insurer fee, expense management efforts and lower transaction-related cost following the collapse of its proposed merger with Humana in February.

Overall, the payer achieved net income of $838 million in the third quarter of 2017, up 39 percent from $604 million in the same period last year. Aetna also saw its commercial medical loss ratio, or the amount of money it spends on medical claims, shrink year over year from 83.8 percent to 81.4 percent.

Aetna’s earnings report did not mention CVS Health’s proposed $66 billion bid to acquire the company.

Trinity Health’s operating income climbs 76% to $266M

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https://www.beckershospitalreview.com/finance/trinity-health-s-operating-income-climbs-76-to-266m.html

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Livonia, Mich.-based Trinity Health’s operating income before other items increased 76 percent year over year to $266.1 million in fiscal year 2017, as the 93-hospital health system benefited from acquisitions, according to bondholder documents.

Trinity Health said revenues increased 7.9 percent year over year to $17.6 billion in the most recent fiscal year. The revenue was largely attributable to the acquisition of health systems in Connecticut, as well as volume growth, revenue cycle initiatives and payment rate increases. The system also benefited from ACO and bundled payment improvement initiatives and premium revenue from the system’s Medicare Advantage plans.

After factoring in expenses, which increased 7.3 percent year over year, as well as restructuring and impairment charges, Trinity ended the fiscal year with net income of $1.3 billion, up from $41.3 million for the year prior. The net income growth was primarily attributable to an increase in nonoperating items.