Community Health Systems posted a $70 million loss in the fourth quarter of 2024, according to its earnings report released on Tuesday.
That’s down from the slim profit of $46 million that the health system reported in the prior-year quarter. For the full year, CHS posted a loss of $516 million, increasing its losses substantially from 2023’s $133 million.
The system’s Q4 profitability fell short of Wall Street analysts’ predictions, but it did beat the Street on revenue with $3.26 billion. Revenues in the fourth quarter of 2023 were $3.18 billion, according to the report.
For the full year 2024, Community Health Systems brought in $12.6 billion in revenue, up 1.2% from $12.5 billion.
The system said the growth in its losses for the quarter are largely related to ongoing divestitures, and gains from the early extinguishment of certain debts. Earnings before interest, taxes, depreciation and amortization (EBITDA) was $428 million in the quarter compared to $386 million in the fourth quarter of 2023.
Admissions at the 69-hospital system decreased by 5.6% compared to the prior-year quarter.
The system said that the EBITDA increase reflects increases in same-store volumes, higher reimbursement rates, changes to its payer mix and reduced spending around contract labor.
Those gains were offset, in part, by changes in patient acuity, outsourcing costs for medical specialists and elevated claims denials. CHS executives also flagged an increase in payer claims denials on their third quarter earnings call.
On the call with investors, CEO Tim Hingtgen said that while increased claims denials continue to be a concern, there are signs that the pressure may be easing.
“On our last call, we mentioned the impact of downgrades and denials, which continue to be a troubling trend for healthcare providers. However, that situation has shown some stabilization since the third quarter,” Hingtgen said. “Our utilization management and physician advisor programs are performing as expected as these clinicians advocate for our patients to receive the appropriate care in appropriate settings, and as we pursue payment for those services.”
The health system reported record same-store volume levels for the full year 2024. Versus prior year, same-store admissions increased 3.2%. Same-store adjusted admissions increased 2.7% and same-store surgeries increased 1.3%, Hingtgen said on the call. “Growth like this is enabled by our capital investments, strong capacity management and the pursuit of strategic value-generating opportunities across our core portfolio,” he said.
CHS also has made investments to significantly expand its outpatient access such as primary care, specialty practices and urgent care centers, he noted. The health system acquired 10 urgent care clinics in Tucson, Arizona and opened two new freestanding emergency rooms, bringing its current count to 19 freestanding EDs, Hingtgen said.
Medical specialist fees and subsidies remain a pressure point, particularly in anesthesia services, he noted.
The health system experienced a somewhat sharper increase in medical specialist fees, exceeding expectations. These fees increased $20 million on a same-store basis, up 12% year-over-year to $170 million in the fourth quarter, Kevin Hammons, president and chief financial officer, said during the call. For all of 2024, medical specialist fees totaled $640 million, up 10.9% on a same-store basis from 2023.
To mitigate this, CHS brought anesthesia care in-house in one of its larger markets.
“While we have made good progress with our in-sourcing initiatives, we anticipate further pressure in medical specialist fees over the near term. In 2025, we anticipate these costs to grow in excess of typical inflationary trends, but still well below the spikes that we saw in 2022 and 2023,” Hammons said.
For 2025, CHS is forecasting net revenue of $12.2 billion to $12.6 billion and adjusted EBITDA of $1.45 billion to $1.6 billion.
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