CHS EBITDA dips 18.1% amid labor, payer challenges

Franklin, Tenn.-based Community Health Systems, the third-largest for-profit system, saw its EBITDA fall by 18.1 percent to $335 million in the first quarter as salaries and benefits as a share of revenue increased by 1.3 percentage points, according to Moody's "Healthcare Quarterly" report, published July 19. 

A significant portion of CHS' business is in rural areas, potentially driving up costs to recruit and retain staff, according to the report. An unfavorable payer mix in these areas may also be a contributing factor. 

However, the two largest for-profit systems — Nashville, Tenn.-based HCA Healthcare and Dallas-based Tenet Healthcare — saw improved EBITDA in the first quarter as salary and benefit obligations softened. 

HCA and Tenet hospitals generally are located in urban areas, where the nursing shortage is less acute than rural areas and the payer mix is more favorable. 

Separately, King of Prussia, Pa.-based Universal Health Services and Franklin, Tenn.-based Acadia Healthcare, saw improved earnings in the early part of the year. Both organizations have a heavy focus on behavioral health, which has been less affected by increases in labor costs, according to Moody's.

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