CYH - Earnings call transcript Q3 2020 | Community Health Systems, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Community Health Systems' Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. of President Vice Comeaux, Investor Relations. Ross you. Thank go sir. Please ahead,

Ross Comeaux

and Community Health you, Mike. third to morning, Good call. Thank Systems' welcome quarter conference

begin all or statements current as like I'd do not statement. may the These to the that certain we historical and solely report of known contain including or disclosure call This the forward-looking are to reports headings statements, such which forward-looking on with and facts. described annual our XX-K relate risks, following conference number Before read Risk unknown a call, furnished in statements to are Securities other Commission. subject filed and Form Factors in to Exchange

differ forward-looking release with As we intend do and expressed from press not those forward-looking statements. issued adjusted update a statements discussion. EPS. financial a calculations results and in of any Yesterday of We consequence, EBITDA to may afternoon, these significantly definitions and statements actual our any in today's adjusted

you live been posted of to has website. those the our presentation this broadcast conference a slide to listening For call, supplemental of

by said, or to to call to employee Smith, settlement; expense this termination well claims estimate recorded legal will like in will liability legal related government settlements HMA early the and call. those for Officer. expenses settlement Chief impairment the and allowances Mr. to costs; of in related Wayne slides from for earnings Executive turn over With valuation refer other change allowance. change tax to on CVR; losses from to Smith? of Chairman change expenses valuation also sale businesses, during loss expenses effect legal accrual; to and that tax debt, restructuring exclude: notes; I'd All expenses discuss benefits calculations other gains charges; promissory in professional gain We as covered the and or extinguishment we as cases from and related related

Wayne Smith

quarter Lynn Officer; third Chief and our and joined on to Officer. Clinical good Operating and and of today Kevin Tim and President Thank you, conference morning, the Executive Dr. call. call Simon, welcome Financial Officer; our Chief Hammons, Chief Vice President Ross, Hingtgen, and Medical Operations with I'm President

results compassion We want managed we me leaders, commitment, pandemic the reported strategies build COVID-XX to on designed as the the hospital other meet global quarter, especially strong management, also third pandemic, with are teams in credit every the caregivers through long-term the ensure a progress a recent challenge advancing corporate especially I frontline success. professionalism pleased while day. our to and with support who single impresses continue that of truly of human and and level Company's to

be the my into will I'm comment of our the beginning to at Tim results, the to announcing the an that CEO of new will XXXX. confident and role Officer, completely and become Executive Chairman of indulge will that Chief Directors on I of just Executive of we new strategic, a decision release issued we CEO. the quarter's Before outstanding yesterday Tim the energetic from Board me transition minute into Company hope press other get you

commitment the his to seen experience be past you that that deep next our knowledge strong Tim his personal leadership know his I his COO. this I initiatives more to and could few will and and to of and labor over and got trust in industry advance has operational are work our company. that certainly You've We've seen done President as have intense not his pleased driving our markets. growth in strategic him good capabilities, CEO. be he role the results years in

I'm provide value provide that It's my job are more to to our company part ensure for and our our the a lot Community ability quality our very has served care Please to and Over Health ability is for moving about health that, of great services in ahead right CEO our industry. support But than with And responsibilities. been confident I of privilege, again we strategies produce things have we have I'm forward constant. shareholders. our our me new completely people and great and and deeply our future And are remain and Certainly, and as to been increase optimistic a his Systems. in executing, organization. Let company continue a a pleasure people for drive congratulating moving on care the lot changed more our great Tim grateful our Tim's the people. decades. keep Board as who Health always we're right me to extremely and say we our and forward and resilience believe the we results. two changed our the our and the CHS investors as Systems effort in has purpose well. of I join for patients. than XX-plus communities of part in safe all years, have to the quality opportunities Board, Community this grateful commitment, I'm positive of

to setting continue course and responsibilities. management As Company, the certain Chairman of Board, I'll level remain Executive of the strategic I'll fulfill executive in involved the

briefly to and Now Kevin let our and markets. and discuss to detail. then manageable in I'll more Tim remains me share currently results quarter COVID-XX give an the COVID-XX, Lynn and turn opportunity

with extraordinary of who an job doing coronavirus needs. other are have well teams and caring as health care those as patients for Our

seeing country, some many in-patient our cases markets. see areas in can the and are of climbing You of that COVID-XX number in we're a rising cases across

have all and learned how frontline all services about need safely continue while keep the the working a and to and over to ensure available several months to for services we essential lot caregivers will who open we think protect past to I we operating, can also remain patients them. patients do

should and in necessary we our I think at and constantly have COVID that proven navigating become agile activity response. are monitor we course, we Of change adept

some to like I'd the a third Now quarter. highlights was on It provide strong quarter. brief

targeted and investments the in margin investments good initiatives, Our very program capital driving volume improvement produced strategic results. the

Our ability services have to resume out in services very early the pandemic, closures phases be quickly turned effectively to after of productive. and the some

efforts Our All have categories metrics produced a improved hospitals stronger continue improved of quarter portfolio the of things to to second time. third the drive noting worth results. go-forward quarter. number over It's should these we during secure results delivered to across compared a positive that

performance As ER business negatively third the impacted sequentially. recommendations surgeries a second the on the restrictions revenues our reminder, admissions, improved government and In surgeries shelter-in-place volumes, net and the and quarter. during elected our quarter,

net up up was to on XX.X%, was the recognized last no EBITDA non-COVID run pre-pandemic we out Act in in quarter, $X.Xbillion, provider basis. net last And revenue approximately which procedures number relief care and funds including was volumes electric revenue versus that in increased growth margin Despite CARES basis X.X% hotspots And the which Adjusted the I from issues same-store negatively same-store was impacted third quarter, did a Adjusted $XXX COVID-XX want below remained quarter. some million, the XXX versus point year. areas. demand, points which EBITDA health year-over-year Our see year. with during rates. markets, of these XX% the were

And operating ratio expense relates capital and costs the lowered of while made were our and expense terms of debt. a combination our repayment up. as reduced In quarter, EBITDA as structure to supply finally, of our percentage a net we lines, revenue, we total progress of debt-to-EBITDA it other debt, during across growth SWB from

portfolio. on comment the I'd to Finally, like

group the for several potential in markets strategy drive a systems. long-term stronger been intentionally past This our Our reshape and healthcare the to to growth. years hospitals where see to enabled targeted us of strategically and portfolio we make into has most investments

before now year. work the in the we of an with completed our complete rest are and pending that We finishing end will the of quarter the third expectation divestitures that the divestitures

We optimization formal confident strategy. We're this with portfolio portfolio. pleased markets our that effectively value remaining and will can our with produce we end

heroic. we on and inpatient pipeline high-return side both markets growth operate. and nurses, more business. focus work We've the is are and continue our employees you as the many how CEO of Chairman outpatient Our and the the through in market improve to in accelerated know support am turn look want and long-term Lynn are on Community is development in as of completed the opportunities singular these all experience my for -- Many proud I CapEx optimistic investments to I call I their where our accomplishments I year, of Health I to other of the Again, increase now I'm company's their want I'm during recognize Executive first I quarters about to access who strengthen across serving Dr. to again of the I and am the very your prove all organization. and markets. am like Board essential the future grateful very how continue physicians, Systems work And who across would people and for now services forward proud and of and over appreciative three years. of this the Directors, points to the the work of the Simon. to to

Dr. Lynn Simon

caregivers, patients non-COVID through well of patients you, this leadership approximately we year. thousands our provided safety communities across Year-to-date, as for Thank for teams, teamwork their and patients clinicians. care to end employees both collaboration commitments throughout to and outpatient confirmed and our departments physicians thank and have we cared and as also the hospitals, COVID-XX for COVID hospital patients support extraordinary the all our of their ensuring emergency like of settings. care and their their bedside for third Through quarter, resilience COVID-XX for XX,XXX I'd and Wayne. and dedication, have staff

the earnings the COVID-XX I across summer, mentioned on last patients in As an increase experienced we in particularly call, Sunbelt space. quarter's

care prevalence early-stage our supply saw quarter, the X,XXX in The in across challenges and of corporate the in and communications counts patients Due X,XXX TVs of including employee created outpatient functions, total, HR across COVID-XX and infection in the combining patients COVID-XX COVID for approximately the than have we the to hospital been and and in did settings, surges markets. health, all patient framework, quarter expertise, X,XXX effectively in September. all In operational we've confirmed other strong August first prevention, planning, more increased year. along and care July, in to approximately support for dual-track our the support third logistics, with hospital industry able half clinical facilities we country. manage we our COVID-XX During the approximately our chain,

duration forward, continue Looking pandemic can ultimate we the of increase remains to that and the the of an parts unknown. country see cases in many

of for hospitals. We our COVID-XX COVID-XX to cases through in real-time visibility dashboard developed internally monitor continue tracking all our cases

leveraging by the of the expertise contingency COVID capacity or on case and support influenza additional our the of of in are planning and continuous and focused We teams of of COVID-XX resourcefulness just hospital and corporate so-called our ways Twindemic assets.

in We will our of number hospitals support continue a to ways.

ventilators, distribution and to front, and and are system hospital in-sourcing that On it monitoring the to management staffing are and supply where proactively patients. COVID-XX ICU as From capacity logistics planning relates to we pharmaceuticals and centralized ensure necessary PPE, a other engaged needed expand critical and our supplies needed. standpoint, is utilization treat overall capacity when

center patient transfer for utilizing fears who our outreach in care comorbidities care and contact of patients telehealth needing support preexisting to leveraging for due continuous are those delaying be to considering both allow those might to and vulnerable preventative COVID-XX. logistics with patients, We

patient COVID-XX testing, and following distancing proactive lead Infective ensuring and meet and especially safety pre-procedural provide social populations As CDC testing safe spaces and with workflows we Prevention always, high-risk and requirements. with for facilities Guidelines

forward, efficiently Tim? effectively. this our safely, in ability manage pandemic through we confident remain and Going to

Tim Hingtgen

Lynn. Thanks,

opportunity like excited to where organization to want Officer Executive the Chief is next about and at optimistic Wayne, say progress I'm our the honored of making I are about become incredibly how our the I year. am I'm beginning and of we First, CHS headed future. next the about

is strong. portfolio Our

proud also the team other Our strategic while past resuming priorities. navigating working and closely extremely COVID-XX is advancing months we've that, strong, and together services how few of by I'm pandemic the demonstrated over

Texas the our quarter. that and trust for his of placed third caring I'm for the CHS me leader hospital course, culture Laura working forward an Board. results. As Executive as accountability. teams and Chairman has has of through and significant we grateful and of the us, Hurricane confidence managed caused successfully new Wayne, of to have look all quarter top in in management Arkansas. Chief two Wayne Board extraordinary of Shifting In been disruption On facilities by August, very and our in Executive minor to hurricanes Directors. of role a I of and company, him strong for a ongoing to pandemic, the the during closely been with also

and in preparation Mississippi to County, Hurricane September, throughout hurricanes, medical our and impacts these we and Alabama more less fantastic these our work in plan Sally Ahead after While and instituted leaders significant hospital and market operations significant Evolving of in caused markets. Florida other disruption hurricane events. staff weather maintaining

Dr. excellent response. demand, hospital COVID-XX, corporate of COVID-XX teams job clinical with full to and return our for an breadth terms Simon, managed In leadership the our more the of successfully done And have support procedures. and has our teams regional managing non-COVID along including elective caring

dial warranted. elective we is strategy, each incremental we for non-COVID-XX to down and COVID-XX and prepared successfully care which or if allow And believe monitor market, forward, refining dial the dual-track are it Company continue our procedures Going we're we up patients. to will to

like our quarter from did quarter not delivered sequential pre-COVID from we quarter. And Overall, second and to lows of third quarter provide I quarter. the comments on third delivered we third April run while Now the the strong return the good performance. second rates, to would improvements some sequential improvements to volumes

not volume X.X% as X.X%, admissions payer our revenue are lower the XX.X%. revenue volumes. Admissions rates down third the and acuity, visit higher a adjusted presenting the to lines improved basis. Surgeries X.X% and sequential the Similar were acuity net due quarter, quarter, contract down were down down Looking same-store visits year-over-year second in on orthopedics favorable recovery.ER were other XX.X%. negative patients at our cardiology, increased contributing and were to offset net ER. our and declines to mix ED with primarily In service

Our rates. returned EMS typically run higher has traffic, volume acuity representing historical patient closer to to

variable restrictions expense down impacted volumes the costs orders. elective side, as and by managed shelter-in-place procedures on On second were the during we quarter negatively

program, costs in well. during I'm made EBITDA improved performance quarter. progress returned leadership combined revenue with the Overall, third third This third the pleased the net very savings about and quarter strategic improvement have performance, and drove our volumes variable from EBITDA quarter, our and teams during with hospital As we the strategic managed year. margin were we margin our excited

and of attention the effectively strategic focus, While COVID-XX our garnered of certainly to have has much execute management plans. our we continued also

This As targeted we have some we points strategic portfolio our divestiture Wayne And is and have hospitals optimistic plan and access nearing current noted, we along includes stronger our announced in core advancements are divesting completion, hospitals, our making markets. in while the about portfolio. been been markets way.

the In quarter. and the investments terms practices, connectivity, of net revenue initiatives, the we as from during are investments benefits center, ACOs the procedures and recapture medical reopened other These markets seeing into helped second third Company transfer patient initiatives. physician have

to forward, initiatives As we markets. leverage we share core our earn look across incremental these plan market to

improvement to about we execution incremental track. strategic opportunities. and continue margin add new remains and This was to planning Our formalized plans plan related our and year implement program ago, on these a

opportunities for margin to program deliver years expansion to expect this We come.

I pleased investments. with our On the very am recent CapEx side,

XXX added across projects excluding we replacement of markets. a Looking number since have XXXX to beds over back today, hospital

during replacement have acute and line the we markets. our term. projects, a date pipeline access by completed projects that Tucson, were Porte, with St. in we Indiana, open completed in In be care facility, opened as remained we hospital of To a points plan investments time addition, next fourth hospital or completed Fort And Saturday. the just new will last we Lutheran micro an just have as extensive construction the we larger In and few hospital of to to the a Indiana, XX-bed downtown in Arizona, to quadrant be which well quarter, replacement XX-bed near hospital highlight opening full-service number complete Wayne, of this year, service is in expect to another complement a Tucson. targeted existing XXXX under Joseph's La

so of uncontrollable great been pleased we result, year I Today, incredible the have and strong entire particularly the strategic a CHS. I'm because assets. very excited year challenges. company across are unexpected a and possible This has As have the during of look about made And we the and we with this future progress with dedication extremely of effort progress collection forward, made many as

and leadership focused strong execution as on Our management are energized XXXX. hospital finish presidents and all regional teams team, highly we

growth Looking beyond stakeholders. on we long-term all I'll call this focused year, delivering the turn you. to for remain highly Kevin, over

Kevin Hammons

Tim, refer instead will and financial you, X-K metrics details. I to to deck Thank cover our for morning, and Similar good typical but I additional everyone. all of the would last you our quarter, today, slide not

due factors, not our recently XXXX previously a XXXX today to guidance, are financial providing and we discussed. of withdrew a we As guidance have reminder, number which we

the any CARES in operating basis, did up a from quarter, admission. prior $X.XXX recognize a $XXX Act in revenues net On came mind, adjusted EBITDA adjusted X.X% funding third increase Keep This comprised net of admissions million, net in million, and XX%. on we X.X%. During the increased quarter. a XX.X% down revenue was during while at into adjusted consolidated XX.X% year in the same-store income decrease basis, an was revenues per not

and increased third revenue the mentioned, million from other percent executed quarter of flow a basis, cash points provided X.X%, basis of This a of quarter improvement hospital Switching X.X%, improved net program XXXX. points revenue. During a net of operations our and quarter, $XX cash revenue. continues cash basis strategic X.X% flow, expense improve revenue operations our leadership points as and same-store a compares And variable managing XXX to operating as the margin negative expense increased $XXX percent On sequentially. XX of of to profile. benefits flows as by margin net cost reductions expense expense our net deliver as up Tim our the third million basis and salaries, well, decreased wages as percent during teams down to a XX for were XXXX. down Supplies

increase, grant and quarter-over-quarter a increase. the provide $XXX lower to and timing Act were higher of management our cash payments. million contributed Company The million relief approximately capital payments interest and to $XXX approximately at also of continued CARES Looking the the received part under in working EBITDA due continued

of months of nine compares billion. operations from XXXX. by the For million our provided months were first cash flows the This first $X.X of to flows nine cash during $XXX operations only XXXX,

Company received approximately accelerated at the relief and including in under net Other year-over-year collections Looking increase, AR also increases The malpractice million CARES decreases, provider $XXX billion grants the lower Company received $X.X were payments. Medicare and offsets. from claim payments of increased the cash Act.

CapEx. to Turning

$XXX in Our was X.X% year. the the revenue revenue CapEx first nine of million net of of to X.X% $XXX XXXX net million for months or or compared prior

have capital portfolio to markets. our invest our to We into continued core strengthen

on As the it liquidity, the of billion had relates sheet. at the the balance to Company quarter, cash of end third $X.X

Company that not As funds, ABL September borrowing of outstanding billion. the XXth, relief up recognize to the Act of had CARES $XXX increase into approximately base the borrowings pandemic from $X during any with capacity we funds ability and million and did Switching the relief Act to the no quarter. CARES the to under income

remaining operating approximately and through reduction in approximately no is $XXX in as So recognized received with $XXX quarter XXXX, second expenses our targeted currently liability. emergency We quarter. third costs the sheet social recognized we $XXX a approximately fund deferred distributions, in income the as the general funds $XXX million The a million on in balance million including during into and public have in both far and services the quarter. health received million

to multiple In terms qualification XXth. June government funds, criteria relief the issued since of the changes the

of October the disclosures evaluating grants future recognize on to and in a recent periods. deferred are that portion these were most expect XXnd HHS We issued

XXXX. the $X.X in the of April As after to the In received to that Medicare Currently, we approximately is which accelerated support of we third previously approximately that discussed, year payment quarter, to scheduled Medicare related liquidity be we recoupment returned million one accelerated begin payments payments will divested of was near-term billion next was April, facilities. issued, April. in $XX

end approximately are have formal low year. our of terms we plan. of completed relatively Florida, divestiture In St. we complete approximately $XXX that the Petersburg, the of nearing do including quarter, our million At program, divestiture to additional expect third for $XXX the with proceeds the through amount Health, generate the of transactions with million from we St. of are closed our hospitals to which Bayfront have of and Subsequent We this this we From proceeds. those will definitive sale transactions of the six of the third point, the incremental received prior two we quarter, completion Petersburg end substantially end program. agreements close year the proceeds. additional we a to generated four in

balance end $XXX is structure. the approximately of Company's maturities. XXXX. of Moving debt no not $XX.X near-term and maturity sheet long-term we quarter, million of the third the to had The of and next billion capital February At until due

confident interest. along we that cash on leverage structure recent results following EBITDA, ratio hand, have lowered open our the growth During approximately interest for liquidity we $XXX reduced annual work, repurchase efforts call cash borrow the adjusted million. in with the to in market Wayne, our When debt cash million of of have by did forward. have of by a amount ABL, operations you. combined our we and our turn with our an our approximately reducing revolving continued ample which divestiture I $XX these our and year, ability million pay down normal Company are position summary, under gain we this to return the will of and million. the million our maturities principal quarter, basis, the transactions, reduced back cash approximately to In we annualized over on cash manage and proceeds to that, through extinguishment With strong our Through and capital to moving and interest earlier debt $XXX third current improved our on ABL, the $XXX Company crisis, $XX of current used

Wayne Smith

we're At open Thank it up ready to operator, this questions. you, for point, Kevin.

question this you as to several able one will limit to But everyone We time. we're of you have time any call. always, at so on talk to

can reach area at (XXX) us XXX-XXXX. You code

Operator

[Operator Instructions] ahead. first Tanquilut Jefferies. Please comes Your Brian from question from go

Brian Tanquilut

years, Hey, work support your all and over morning, and and Wayne, congratulations. good Tim, thanks your for the

the of that So Obviously, and pace you're still recovery a up I the on acuity my be seeing. lot moving guess margins question volumes would parts of with and pressured. just going

So I that. want thinking how just hear to about you're

You next is normalized we of have the of recovery acuity and pace and you've year. lift once And that Thank QX margin revenue what the through addition more into think trends? delivered do sustainable you. per you see

Kevin Hammons

Brian. will I Sure, that. take Kevin. This is

costs. So as job certainly we an with volume, of done, have have think, labor through lower I managing managed our exceptional we

contracting sticky, So flex of that They work we've late and for those services, program to supply, on started we're speak. volume. be and purchase consistent those are initiatives contract we deal non-patient-facing been we able how The we focused XXXX, how in really margin so the very lower according with lot to a to believe labor improvement expenses. to

So, we believe forward those back. come volumes as expense reductions continue going will

And so permanent. will more margin that be lift

Wayne Smith

our is that improve come of we're also to beginning that margin designed Don't program through. forward going to rationalization see forget kind and portfolio our

Operator

Josh from Nephron line go Your is Research. Raskin next Raskin question Please ahead. your comes from Josh open.

Markets. comes Please RBC question from Capital go from next Your ahead. Morgan Frank

Frank Morgan

over saw admits. the you Is current surgeries COVID -- did the And Any I'm I requirements fourth how on fourth voluntary in had trends into Tim Lynn of so and some you. into is quarter? month say, provide in Lynn you the, that far quarter, congratulations commentary, of the little I made needs about, how And hoping color Thank over that underlying and around patients around last the do morning of services number have then you'll can the you to a new months as the curious, color in terms roles suspension was kind to did quarter? of or any make transition. additional transition you these the quarter? the of that more this was in quarter. and of maybe carried the utilization the think get Good

Tim L. Hingtgen

is quarter on this higher during space. free, Lynn, We start our if add Frank, to quarter third you with it anything that Great. Tim. off. cases started in Sunbelt obviously have the second to And COVID I'll obviously, commented of our earnings surges call. we

recovery, a I pent-up shared of were some very impact from from our business the And did We getting the think, great deferrals in COVID door. saw concerns way, some on we come through that. June June states only were that our staffed on certainly cases and equipped July care work in the what would by again, was as responsive we shifting has see and rest for But very We deal just focused the cases, We elective benefited for resources consumer of also, driven, at curtailing as or demand. Mississippi. point, volumes up we care for being forefront. the felt the two counties the the recovery. normal having I care elective the of Texas I call, We throttling was more back or surge August. had guess, not delayed so the or with expected, much subsided, into related to that and deferred consumer reflected think, into hospital. to from vantage down most to orders in in I and of But markets, those in our had, We being some end. requires our the that well

and pipeline business, our still as focused we the I investments In our new third great a building far call our talked strategies. of think of we've so very backlog. all we're the a on in deal quarter, of about shared today with

further were of into recovery. into terms October, September heading was we month, that heading October, In volume good of with progression our a pleased the

And that on do we We today, for procedure think shutdowns will. a monitoring any we're very seen instituted resurgence to as testing a haven't has where are, some requirements we program. basis. out prudent rigorous COVID curtailing or services pre day-by-day we of elective necessarily it's pointed seeing so, Lynn

in we'd upticks pre-procedure pulse have we as would believe see we happening, so the for that pre-surgical good adjustments on monitoring COVID every operational make So day warranted. patients obviously a if we on

Operator

Giacobbe question from comes Ralph go Your Citi. ahead. next Please from

Ralph Giacobbe

capture you pandemic, as just the maybe guess I is challenged and hospital? factors thoughts initiatives population And to presenting point remains I But ER of just still. plan, those cities, think at centers of and term you're cited. the the your the remind longer you of and accelerating of maybe strategy there? any within lower about and market any effects us again any access thoughts acuity on the it not transfer your your kind then if that migration volume obviously sort out know to larger of that's stemming

Tim Hingtgen

of off. be certainly Ralph, anyone to seem a it's at for for And last dwellers again, and that we've non-urban watch. desires say, jump we seen population we any couple suburban it that to I'll in trend shift, in I it's some does locations. to uptick the some think we'll certain that of any continue tell markets? it Have here. read mentioned terms longer of But quarters, our urban or in look soon to to think articles too impact I free there start

the you for the we've of of to the I other, from the setting. care for would structural say, terms if the to will, been lower to movement shift, acute go sector In planning one acuity outpatient

our For I serve us acceleration those several urgent think into instance, lower progress the versus some see think freestanding I access care business. you access pretty the COVID, regular then acuity for and updates with point they strategies, last CD I well. think, ASCs, very on into given, And points settings, our we've investments years with EDS,

get focused how really one So we're the point, to customer we build thoughtful we're where strategy, in and But consumer been that pleased we is. have those. out strategic at

serving the for us trauma. shifts. transfer how acuity third in did really help the build transfer really into center quarter, us in is enables of of which our the activity, the performance Now in of to the and hospitals to with in transfer connect despite move well has The that conduit affiliated our from our admissions, they're shows our we And some as decline those line an In as we're out as hospitals market. a a increase been That lower were really invested structural non-CHS those the in we've advancement, patients assets pleased neurosurgery, center capital care networks just invested. Intacta service to our we've see lower acuity areas surrounding our us results. complexity to maybe higher center acuity setting cardiac, sites

Wayne Smith

increases Ralph, terms So any any kinds of of of ship things. seen or dramatic or in those we change any haven't population

stable same-store forward a number quarter, year years, built on And of number hospitals have these we've been is we markets in for relatively a our of to this have is opportunity that the the and the going market for years. markets. had and This increase share

ship. to a program One huge we where that's we get to about ourselves our those hospitals divestiture we're was in down And population grow. continued could group that we of for find did without markets reasons and a the growth excited with digital this sustainable of the today, or opportunities

Tim Hingtgen

in the akin think, to or both to what over we've the markets side. out be certainly, built have Naples list, acquire to We hospitals, go to share. down in would just we on market think couple added where Sonic beds of investing opportunities we but grow years. new our to to point markets portfolio, last our it well XXX I are over normal it. it like acquisitions earlier, comment a the And couple been stronger any maybe and I a positioned a Birmingham, out, outpatient acquisition we the And didn't of and but Knoxville, the presence I we've point and made inpatient Key

Operator

comes of America. Fischbeck Bank ahead. Kevin go from next Please from Your question

Kevin Fischbeck

pay sheet from I available of billion fact were how the asset deployment? being the free kind And forward? in cash the as you debt going of about of proceeds. you in actually much $X.X some I quarter. leverage think How the down guess, had million able balance plus to dollars that appreciate guys couple you another should ability hundred do for to think of reduce cash actually flow cash through we

Kevin Hammons

to until around with and of payment when be to over April new likely in repayment accelerated period approximately around when extends meant no period, be Sure. certainly, the that until which accelerated which vaccine. COVID Kevin. we and a year have money by of out next last, being government the knows back roughly going paid the us the that's XXXX. rules still not said, was next provided yet around surge throughout kind starts, That is of be. be to the assistance will And was how is a will There's one There'll then a give time. This and pandemic uncertainties million $XXX the long that lot Medicare it's of

results But to fair the expect navigate kind still be flow, improved leaves cash unknown. of we And through on our which will with positive of of of of our some amount capital so forward, forward. EBITDA be through just hand that that the free are cash and kind currently and management we working expect a going pandemic us to and going we

So some us that flexibility. gives additional

Operator

from Andrew Barclays. from ahead. Please go comes question next Your Mok

Andrew Mok

COVID follow both system. cases admissions? characteristics length I insurance hospital to again for and can quarter patients, those inpatient across of ventilator like typical to cases And many Can of the Tim. you treated Congratulations the quoted in Wayne up hospital XX,XXX and provide you were items some on you Wanted usage? of share your the relatedly, think COVID stay, of that's coverage inpatient in the how

Tim L. Hingtgen

over some Great. it Andrew, hand clinical kick the this I'll of on Tim. off and is then it Dr. Simon to aspects.

that the was the of numbers on side of XX% about the of business. provided, terms we In inpatient

it's of track you've patients. keep we patients payer In But older Medicare terms are of. mix, obviously, what recently, those to of age, something read and Advantage higher of heard XX penetration or similar above, most

clinical of I'll advancing care, In Dr. it the terms to turn Simon.

Dr. Lynn Simon

little seeing a strong side on the the IC, well. on we from then still standpoint, surge a than certainly, IC a seeing and more just did little we're are as lower pandemic, And we're early that age we in demographic bubble patients but

patients So little shift require a seeing hospital stay. longer standpoint, a that these that clinical from a bit saying of the we're patients we're in little

the stay length early that side steroids ventilation about. things Cronan, So the you mortality, overall, of remdesivir we're on, all the less better on is ICU extended hear et cetera, elsewhere, But and and a inpatient use of like improved and little therapeutics the bit, side. seeing between both

out the and treatment in down with more clinicians that, think are think coming their therapeutics others I much as the well comfortable and getting saying encouraged we're line. related more to I

Operator

Your next question comes from A.J. Rice from Crédit ahead. Suisse. Please go

A.J. Rice

quite across you to much there's with I I are volumes staffing when ER you ER about Wayne. subsidize the in as been you, could as you they use are generally. ask to six firms and this of typically weakness know your as temporary then And everybody. on industry. them Hi, down being and And asking deals? have on the the volumes, year? nurse the do months there in the if also to of around turns back those to volumes Best a Tim headwind that? that are way seeing been of year to of wishes the pandemic back been this role. the I has next come sort And what It's new guess labor renegotiating just Is we go labor ride to through seven maybe a terms wages? staff, use turnover, I congratulations that front, as ER

Tim Hingtgen

one off. I'll kick that

and limiting think I contract were trends, the good did inpatient in quarter latter of labor, in a second of job suppressed. when labor volumes contract the our of first part the obviously, we terms In quarter

significant So labor decrease a we actually had contract utilization. in pretty

for I as rate, that in for concerns course, to the We in but staff can the reasons physicians, other we about, them weeks, a or hard wanted of I rate, we've of. be an some anticipated contract over staffing seen an take we those, increase surge. contract to That somewhat that the have little up safe last for we'll in labor labor the with had margin or have up several seen pools very various agency types rates that and need they're we we've particular, COVID all other of some of the think in terms of to cases is pools, And all improvement get manage. emerging last space, sometimes it -- other, mindful offset nothing initiatives working for bit but labor of headwind have read turnover nursing nursing go back contract again,

on ER In terms our the drop. with in the subsidy, volumes by adjust the that's also of pandemic partnering to we staffing once we and out ED saw there tackled volumes something vendors early

terms sort So or in subsidy in uptick subsidy staffing requests because guess, fixed a of their I there staffing with we for an work which of them, spend what have in our some their some avoided contracts. to were could expense have lot increases. been you and reduce is costs, core have to able I of think, Obviously, those headwinds

who of the appeal. criteria there's thing last qualify ending new Act in groups year mindful our application their we to the ability through, some came to I a which be package other attract process for as special XXXX CARES of The make vendors funding that to practices asked well. all go the for to those is to didn't based believe vendors for And upon

other if see to we're if Act we shortfall working any any over help those to Kevin But I'll for funds. groups, commentary. there those So turn CARES is with can access them

Kevin Hammons

would people be don't think some I the is that of to pressure staffing as well labor I even overall contract anything subject on outside and the thing some But of rate, the would only kind The regionally what or add is just Yes. regional of saying. experiencing locations. norm we're other of

Wayne Smith

this advantage outpatient to business, of other of telemedicine delivery and which formats, we're Some positioned has course, ED to well moved of. take

Tim Hingtgen

good Yes, we volumes. of another had telemedicine quarter

well. in with goes patients direction As we pleased and with practice our traditional ability highs, more care from down our the second drive patients new still the visits side, had that for into as we're quarter to come practice to but

Operator

Josh Raskin our And ahead. will Research. Nephron from question Please from go last be

Josh Raskin

Can better guys hear me you now?

Tim Hingtgen

it's We better. can. Yes,

Josh Raskin

Perfect. right. All

decision-making on Tim level of acuity normalized rescheduling sort to procedures Sorry weren't sort operator with is to are last and and well? And do of about more help back think the procedures the back of that? that procedures of of of prioritization how we community and the and couple just part ebbing My sort Wayne that the me And as you decades of and there'll process, hospital are of as I'll help sort of certainly physicians the the a do be back that. to the as coming get prioritized as an echo with for question, congratulations the that well. you coming

Tim Hingtgen

is it Tim. off. I'll start Josh, this

terms then vulnerable through stay some, pandemic. procedures, of I our phases that's through our their employee the with our staffs sure haven't through systems make in and gaps happened We outreach for their record doing we're proactive virtual practices, suppressed and volumes with some patients, And prioritization of had our our In a pandemic. to connected as and and been with particularly wellness the for patients in sure patients visit. medical safety. the of care, mechanism care, our thing through to making calling more of ambulatory practices due who have we guess, to from same for in did outbound close analytics We work the we all closely means own the medical proactive perhaps approach these

with relatively the good to to midnight new on a that. for pretty two or orthopedic setting surgery outpatient back We pleased, managed ruling Public volumes on Medicare hips. in are even of hips ambulatory had the a that quickly. the still procedures flattish again, have We rule volumes. acuity quarter migration came higher there's large We though setting joints,

saw if for employed cases our in back particularly of the surgery. in with So our then seniors. lot age elective two. of shortfall And at the in was the decline effectively I'll GI total and partner acuity a elective, high again, that, good the saw Where bring pediatric was for a quarter. indicators at large And that proportion providers we can look and care in look to care. the pretty the with markets our door. ENT, for decline that somewhat obviously, age in ENT all as we independent a bracket, the for lower we that say was GI volumes we adults, care, the surgery number very you

So as those pretty have good grasp we where to a are. cases

But patients five-year patient. on we've Now colonoscopy we'll keep it in new cycle development don't the when at really with into back much those our get in why doing strategies. surgeons turns we think can connecting get colonoscopy focused moves next where some Those just to annual a want they demand That's GI, if outreach the for need. future, care screening just those screening, pent-up how point, that generating think proactive been and into for line door, of them being on for the that an It terms care is. it's a cycle our and own our surgeons. I know we or service I

Dr. Lynn Simon

early And states some on, CMS there were about should prioritize. guidelines surgeries other like and what

they they medical And those there's individual But to needs who same procedure, guardrails, to more you provide them because back patients task, the So health time, the the if of letting elective but to need may a certainly, get bring knowing communities future really that their code preventative a back patients have higher well how outcomes. closer decline following in certainly, acuity, to are or decide in in. come they it's the those lot discussion care. as to wanted need of around, at

those we on need. that the So making really sure in care focused very get get they to patients

Kevin Hammons

how sustainable acuity centers. our to intentional and In think is the higher focus surgery terms on of our ambulatory, out acuity, with to of the of levels your related site shift I question building care

centers. surgery XX about have We

lower care. ambulatory good We Appropriately, have the moves setting. XX markets are or so strategy to most cases, of that another a so acuity in some still, our minority have partnership, as

balancing to transfer I with the capital, portfolio. So our in acuity hospital a case of drive and and the to I there's sustainability the do service standpoint, lines, mix center, doctors, right lot our the that investments continue think recruiting ability expanding from improvements across a think

Operator

now the call turn to Mr. comments. over will closing for back I Smith

Wayne Smith

leadership are combating Thanks deeply to to and provide front, hospital us corporate how staffs, hospital express with once want today. teams global those care teams, regional the to medical pandemic again support forefront how for for I of employees, physicians, teams, time been affected. have our we support spending this exceptional again grateful of all presidents,

and extremely area care call our for to serve years. communities the to holders last patients trust XXX-XXX-XXXX. forward code any our our if shareholders Once now We the appreciative always And readjust value in for our your demonstrate with Thank I and updating their thank concludes our look XX again, Company's debt once you. strategies to can confidence This move employees, have am and we we and our on the to ahead and to investment again, and grateful over today, questions, continue you, a to physicians progress. our maintain support all provide you you organization. partnership, for outstanding at you reward in to

Operator

gentlemen, and Thank you today's this conference call. participating. concludes Ladies for

disconnect. now may You

Community Health Systems (CYH) 28 Oct 202020 Q3 Earnings call transcript