CHS continues to restructure as it struggles with debt
Franklin, Tenn.-based Community Health Systems recently completed the sale of nine hospitals, part of the troubled hospital chain’s plan to divest
30 facilities and offload debt.
In this latest round, CHS sold hospitals in Louisiana, Pennsylvania, Texas and Washington. CHS announced the divestiture plans in its first-quarter earnings report, posting a $177 million net loss, down from a $36 million profit over the same period last year. The system had $14.69 billion in debt in the first quarter, down slightly from $14.79 billion the quarter prior.
The system is still reeling from its $7.6 billion acquisition of Health Management Associates and its 70-plus hospitals. It spun off 38 of its hospitals into a separate, independent company called Quorum Health Corp. last year and used some of the $1.2 billion of net proceeds to pay off debt and improve its debt-EBITDA ratio, CHS CEO Wayne Smith said.
“Our current divestiture plan will also allow us to move to a portfolio of hospitals that are better-positioned in our markets with better volume growth, higher EBITDA margin, improved cash flow,” Smith said in the first-quarter earnings call. “This will also allow us to direct future investments in our most attractive markets and regional networks, which provide a higher return on capital.”