CHS not worried about latest wave of COVID-19 impacting elective care

Community Health Systems
Community Health Systems posted $3 billion in net operating revenue for the second quarter of the year, roughly in line with revenue from the first quarter of 2021. (CHS)

New surges of COVID-19 sparked by the more transmissible delta variant do not appear to have a material impact on elective care, according to executives with hospital chain Community Health Systems. 

The chain said during an earnings call Thursday that its patient volumes are rebounding to largely pre-pandemic levels in the second quarter of 2021. Executives added that the system has taken preparations to ensure elective care isn't interrupted by another surge.

"We have been monitoring that closely and not seen a material impact," CHS CEO Tim Hingtgen said during the call in response to a question on delta-related spikes. "It goes back to our experience with managing the previous waves of COVID-19, dual-track strategy and well equipped to manage COVID-19 care safely."

CHS posted a $58 million net loss for the first half of the year but did post $6 million in net income for the second quarter, rebounding from a $64 million loss in the first quarter of 2021. The system posted net operating revenues of $3 billion for the second quarter, roughly in line with the revenues it generated in the first quarter.

Overall, CHS posted $6 billion in net revenue for the first half of the year, an 8.6% increase compared with $5.5 billion for the first half of 2020.

CHS reported that it saw about 3,000 COVID-19 admissions in the second quarter compared to nearly 10,000 admissions in the first quarter of 2021.

The decline in cases coincided with spikes in surgery admissions that reached pre-pandemic levels. 

Same-store surgeries increased by 1% compared to the same period in 2019 and admissions adjusted down 4% respectively, the system said. 

"Our hospital leadership teams continue to adjust extremely well to the operating environment [and] continue to utilize a dual strategy," Hingtgen said.

Overall admissions increased 5.1% and adjusted admissions by 8.7% for the first half of the year compared to the same period in 2020, CHS said.

In the second quarter, admissions increased by nearly 5% and adjusted admissions by 15.7% compared to the second quarter of 2020 when the pandemic’s effects took hold.

“On a same-store basis, net operating revenues increased 30.2% for the three months … compared with the same period in 2020,” CHS’ release on the earnings said.

Some of the key drivers in expenses caused by the pandemic have started to subside as well, including the high cost for contract labor such as travel nurses. 

The system is "seeing an easing on [the] rate and use of contract labor," Chief Financial Officer Kevin Hammonds said. "That came down significantly from the first quarter to the second quarter."

However, the system is seeing "a little bit of higher inflation costs with respect to our labor," he said. "This does vary market by market."

CHS is the latest system to post earnings in the second quarter due to hikes in admissions. HCA Healthcare posted a $1.2 billion profit for the second quarter after seeing a 20% boost in its volumes.