Select Page

Following the Community Health Systems (CHS) third-quarter earnings call on Thursday, WANE-TV reported on what might be in store for Fort Wayne if CHS decides to sell more hospitals: ”CHS said it’s still pursuing other ‘interests for sale transactions involving hospitals with a combined total of at least $2 billion in net operating revenue.’ As one of its most profitable hospitals–does this mean Lutheran?”

The call (available here:; slides available here: (…/6ad37c02-e66a-4850-913a-da0d13…) sounded more like a weather report than a cogent explanation of CHS’s terrible results. Which leads to a few additional questions:

If the hurricane, mentioned repeatedly in the call, was responsible for a “one-time” cost, why is it that the LHN decline was in a similar range? No hurricane hit Indiana. It is difficult to untangle the CHS adjustments, but it would appear that projected hurricane losses may be overstated.
CHS stated that physicians had been hired in the Fort Wayne market. It seems to us that LHN has lost more physicians than it has been able to hire. Might those hires include ER and anesthesia contract groups?

The amount of capital expenditures has declined significantly. NICHE wonders if enough can be spent across LHN to cover normal depreciation.

After selling over 70 hospitals, CHS’s debt remains at $13.9 Billion! If earnings (now projected as low as $1.7 billion) follow the decline evidenced across the U.S. hospital universe, what will be left after deducting estimated interest payments of $960 million? NICHE would not be surprised if earnings fell below $1.5 billion.

And finally, how long will the CHS Board of Directors support current management? Where are the two promised independent directors slated to join the board? Do the directors have a duty to shareholders? As Nashville Public Radio reports (…/investors-want-know-when-…), it’s no surprise that these questions are already being asked in Nashville.