Community Health Systems Inc., the Tennessee-based hospital operator that owns Rockwood Health System in Spokane, recently reported a sizable fourth-quarter loss, causing the system’s share price to fall more than 25 percent.
In its year-end financial results, CHS reported a fourth-quarter loss of $83 million, or 73 cents per share, compared with net income of $100 million, or 88 cents per share, in the year-earlier quarter. Revenue in the fourth quarter also fell slightly to $4.8 billion, down from $4.9 billion for the same period in 2014.
For all of 2015, the system reported net income of $158 million, or $1.38 per share, up from $92 million, or 82 cents a share, in 2014.
According to the financial information website MarketWatch.com, the morning after reporting its fourth quarter results, Community Health’s shares fell about 22 percent in midmorning trading to $14.53. As of March 8, the website lists CHS shares at $16.44.
In a Feb. 15 press release, CHS CEO Wayne Smith said the company’s results were hurt by comparisons to last year’s fourth quarter results, in which the company saw a higher number of emergency room visits and hospital admissions due to the busy flu season.
Smith said the system has also seen slower-than-expected operational improvements in markets where CHS owns hospitals added two years ago as part of its Health Management Associates acquisition. Smith said the results also were affected negatively by an increase in the system’s allowance for doubtful accounts, impairment of long-lived assets, legal fees and settlement expenses, and costs from its planned spinoff of a new company to be called Quorum Health Corp.
Quorum is to be a new publicly–traded company with 38 hospitals and outpatient services in 16 states, focusing on the system’s rural markets. The system recently announced that due to current market conditions, it has decided to delay the intended spinoff until later in the first half of this year.
Community Health Systems is one of the largest publicly traded hospital companies in the United States. Through its subsidiaries, the company currently owns, leases, or operates 195 affiliated hospitals in 29 states with a total of about 30,000 licensed beds.
None of the system’s Spokane-area facilities, which include Deaconess Hospital, Valley Hospital, and Rockwood clinic, are among the 38 small-market hospitals CHS plans to spin off into Quorum Health Corp.