Franklin, Tennessee-based Community Health System posted a $79 million profit on $4.9 billion revenue for the first quarter of 2015, the company announced Tuesday. The results are a steep recovery after the operator of 200 rural hospitals posted a $112 million loss in the first quarter of 2014.
Like other for-profit healthcare organizations, CHS is attributing the gains to Obamacare.
“We are especially encouraged by improved volume in the quarter, demonstrating the results of our strategic growth initiatives and the incremental benefits of the Affordable Care Act,” said Wayne Smith, chairman and chief executive officer of CHS, in a statement. “We remain optimistic that these positive trends will continue as a result of growth in exchange enrollment.”
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The company’s same-facility admissions increased 0.4 percent year-over-year while adjusted admissions increased 2.5 percent. For the full year, CHS is forecasting income from continuing operations in the range of $3.40 to $4.05 per share.
“We believe we have a sound strategy for success in today’s dynamic healthcare environment as we continue to apply our centralized operating model, recruit qualified physicians, manage costs, build integrated networks, and, above all, focus on the safety and quality of care in our hospitals,” Smith said.
CHS now has 59 surgery centers, 41 urgent care centers, 6 freestanding emergency facilities, 148 diagnostic centers and 1,600 physician clinics spanning 29 states.
Thanks largely to Medicaid eligibility expansion, uninsured and self-pay patients are declining. Across all CHS’ states, self-payment is down 12 percent and Medicaid reimbursement is up 8.3 percent. In eligibility expansion states, self-payment is down 15 percent and Medicaid is up 7.7 percent.
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On the whole, that’s gradually shifting the company’s payer mix. Self-pay in early 2014 stood at 14.5 percent of the total. It’s now at 12.6 percent. Medicaid climbed a full percent to 10.4 percent, while Medicare and commercial plans remained largely steady. This year’s new Medicaid coverage expansions in Indiana and Pennsylvania, where CHS operates a combined 28 hospitals, should continue that trend, although 10 of its major states, including Alabama, Florida and Texas, still have millions uninsured residents in the absence of Medicaid eligibility changes.
Community Health Systems’ $7.6 billion acquisition of Health Management Associates also produced $125 million in revenue in 2014 last year and is on track to yield another $150 million this year through overhead reductions and revenue cycle and supply management.
Twitter: @AnthonyBrino