Community Health Systems posted a significant loss in the second quarter amid decreasing admission rates but still beat analysts' expectations.
CHS, which is the largest provider of general hospital healthcare services in the U.S., revealed a $110 million loss as part of its second-quarter earnings—an improvement from a 2017 second-quarter loss of $137 million. The one-cent loss per share was far lower than Wall Street watchers had predicted; experts had estimated a loss of 43 cents per share.
The system earned $3.56 billion in operating revenue, a decrease of 14% from last year.
The losses were attributed, in part, to a 16.9% decrease in admissions compared to the second quarter of 2017, and admissions overall this year compared to last are also down by 18.3%. CHS also saw an 18% decrease in surgeries and 18.7% decrease in emergency room visits so far in 2018 compared to 2017.
As CHS is working through a significant financial downturn, CEO Wayne Smith said the results are encouraging. Same-store revenues increased by 3.3%, bolstered by a slim 2.3% decrease in same-store admissions. Smith said that trend was driven by improved performance on surgical admissions.
Smith also touted CHS' improvements in patient safety over the course of this year. Reducing medication errors has been an area of particular focus, and between January and June, CHS hospitals cut medication mistakes by 50%.
"Overall, we're very pleased with the progress made in the second quarter," Smith said on the quarterly earnings call.
Community Health Systems has posted significant losses over the past several years, including a whopping $2 billion loss in the fourth quarter of 2017. CHS' revenues were hit especially hard by Hurricanes Harvey and Irma last year, which led to an admissions drop of nearly 20% in the latter part of the year.
Amid the financial woes, a major CHS investor called for Smith to be fired.
Part of CHS' financial recovery strategy has been divesting facilities that are not in its most valuable markets. It sold off 30 facilities last year and has sold seven so far in 2018. CHS has definitive agreements in place to sell five more, and Smith said it expects to close the majority of its divestiture plan by the end of the year.
The markets reacted positively Thursday night to CHS' report, and its share price was up by about 8% late Thursday. On Friday afternoon around 2:45 p.m., CHS' share price was down about 5% at $3.12 a share.