Franklin, Tenn.-based Community Health Systems CEO Wayne Smith has a positive outlook on the company's future, despite a rocky 2016.
CHS has been through significant changes in recent years, including the spinoff of Quorum Health and the acquisition of Naples, Fla.-based Health Management Associates' 71 hospitals in 2014. Although CHS expects these changes to benefit the company in the long term, they have presented some challenges in the short term.
Adding to the company's troubles is its hefty debt load of about $15 billion.
Mr. Smith commented on the company's troubles at the J.P. Morgan Healthcare Conference Jan. 11. "2016 has been a difficult year for us, as many of you all know," he said, according to the Nashville Business Journal. "But we're extremely positive about our future…We believe that we're doing the right things."
To improve its finances, CHS put a turnaround plan into place last year. In an attempt to trim its debt load, the company is selling 17 hospitals and other assets to generate an expected $1.2 billion in working capital. The company moved forward with that plan in recent months, divesting several hospitals and its home health business.
In November, CHS signed a $425 million definitive agreement to sell Spokane, Wash.-based Rockwood Health System to Tacoma, Wash.-based MultiCare. That transaction is expected to close in the first quarter of 2017. In December, CHS signed a definitive agreement to sell Yakima (Wash.) Regional Medical Center & Cardiac Center and Toppenish (Wash.) Community Hospital to Sunnyside (Wash.) Community Hospital & Clinics for approximately $45 million. That deal is expected to close in the second quarter of this year. In January, CHS completed the sale of a majority interest in CHS Home Health to Louisville, Ky.-based Almost Family, a provider of home health nursing services.
"We're on a track to reduce not only the size of our debt but also to reduce our [debt to earnings ratio] going forward," Mr. Smith said at the conference Jan. 11, according to the Nashville Business Journal.
CHS is slated to release its earnings for 2016 in February.
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