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Tennessee-based Community Health Systems posted a net loss of just over $2 billion for 2017's fourth quarter, compared to a loss of $220 million this same time last year. The system saw diminished operations cash flow, admissions, hurricane aftermath and a big hit from bad debt.
CHS owns, leases or operates 127 hospitals in 20 states, with about 21,000 licensed beds under their umbrella.
Net operating revenue saw a 31.6 percent dip to $3 billion from $4.4 billion in fourth quarter 2016. The system cited a $591 million increase in contractual allowances and provisions for bad debt as part of what impacted their system's finances.
The system's rate of total admissions dropped roughly 19 percent compared to 2016 and decreased were also seen in surgeries and ER visits. They also incurred close to $1.8 billion in impairment charges and losses in the fourth quarter related to the sale of CHS facilities.
Mother Nature had an impact as well in August and September 2017. Hurricanes Harvey hit CHS facilities in Victoria, Texas, interrupting business and spawning additional costs. Also during September 2017, Hurricane Irma hit many of the Company's hospital operations in Florida and at one of its hospitals in Georgia, with both experiencing disruptions. CHS estimated that these hurricanes resulted in a loss of net operating revenues together and additional expenses directly related to hurricane response efforts of approximately $40 million during the year ended December 31, 2017 and the three months ended September 30, 2017.
"The impact on net operating revenues was the direct result of the evacuations and population disruption prior to the hurricanes, as well as during the aftermath and recovery efforts in the communities affected by the hurricanes," CHS said in a statement.
In accordance with previously stated plans to right their ship, the company sold 30 of its hospitals in 2017 and has no plans to slow down. During their earnings presentation Wednesday, the company announced three more definitive sale agreements, with overall divestiture plans for 2018 of about $2 billion, with $1.3 billion expected in gross proceeds that will translate to $1 billion in net revenue for 2018. CHS also posted gains in the reductio of their long-term debt from approximately $14.8 billion at the end of 2016 to $13.9 billion at the close of 2017.
"We are pleased with our progress in the fourth quarter and expect to carry that momentum through 2018, as we execute strategies that we believe will strengthen our core business and drive improved results," said Wayne Smith, chairman and chief executive officer of Community Health Systems. "In 2018, we remain committed to growth initiatives to advance our competitive position, including expanding our transfer and access program across our networks, launching Accountable Care Organizations, and strategically expanding outpatient services."