Quorum Health Corporation Announces First Quarter 2019 Results
First quarter net loss attributable to
First quarter Adjusted EBITDA was
Revenue cycle management partnership with R1 RCM expected to provide
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Unaudited Financial Highlights | |||||||||||
(In Millions) | |||||||||||
Three Months Ended |
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2019 | 2018 | ||||||||||
Net operating revenues | $ | 442.8 | $ | 486.8 | |||||||
Net loss attributable to |
( |
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Same-facility net operating revenues | $ | 445.0 | $ | 461.6 | |||||||
Cash flows from operating activities | $ | 8.1 | ( |
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Adjusted EBITDA(1) | $ | 20.6 | $ | 18.4 | |||||||
Same-facility Adjusted EBITDA(1 & 2) | $ | 23.5 | $ | 27.1 | |||||||
(1) A table providing supplemental information on Adjusted EBITDA, Same-facility Adjusted EBITDA and reconciling net loss to Adjusted EBITDA and Same-facility Adjusted EBITDA is included in this release. |
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(2) Same-facility Adjusted EBITDA was previously reported by the Company as Adjusted EBITDA, Adjusted for Divestitures. There has been no change in how the financial measure is being calculated. |
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Financial results for the first quarter ended
- Compared to the first quarter of 2018, same-facility net patient revenues decreased 3.5%, while same-facility net patient revenues per adjusted admission increased 1.4%. The decrease in same-facility net patient revenues relative to the first quarter of 2018 was driven by a 4.9% decline in same-facility adjusted admissions and an 8.6% decline in same-facility surgeries. The decline in volumes relative to the first quarter of 2018 represents approximately
$21.8 million of same-facility net operating revenues.
- First quarter Adjusted EBITDA was 4.7% of net operating revenues and Same-facility Adjusted EBITDA was 5.3% of same-facility net operating revenues. Same-facility Adjusted EBITDA reflects a
$12.9 million reduction in same-facility operating expenses relative to the first quarter of 2018, primarily as a result of the Company’s margin improvement initiatives, which were implemented in the second quarter of 2018. - Same-facility net operating revenues in the first quarter included a
$4.5 million adverse impact resulting from a decline in self-pay patient collections since the transition of the Company’s secondary collections activities onOctober 1, 2018 . Secondary collections have continued to increase since the transition with April collections reaching pre-transition levels. - Same-facility surgeries in the first quarter of 2019 were negatively impacted by weak outpatient demand. Of the decline in surgery volumes, 68% is concentrated at four facilities and is related to independent physician turnover and the Company’s efforts to re-syndicate two underperforming outpatient surgery centers in
Illinois . Since the end of the quarter, the Company has seen same-facility surgery volumes trend positively compared to the same period in 2018. - Same-facility admissions for the first quarter are impacted by the Company’s margin improvement initiatives to eliminate certain unprofitable service lines, underperforming physicians and unfavorable managed care contracts, which were implemented in the second quarter of 2018. Same-facility admissions were also negatively impacted by a decline in flu-related admissions, which reduced same-facility admissions by 1.6% compared to the first quarter of 2018.
Divestiture Update
- Subsequent to the end of the first quarter of 2019, the Company completed the sale of
Scenic Mountain Medical Center inBig Spring, Texas onApril 12, 2019 . The Company used$12 million in cash proceeds from the transaction to pay down its Term Loan Facility. - During the first quarter of 2019, the Company expanded its divestiture efforts by adding additional resources to market hospitals for sale. Since this time, the Company has seen an increase in interest from potential buyers for both individual hospitals and groups of hospitals. As a result, the Company reiterates its previously stated divestiture proceeds target for 2019 of
$125 to$175 million .
Partnership with R1 RCM
- The Company announced on
May 8, 2019 that it is partnering with R1 RCM to provide end-to-end revenue cycle management services. The Company expects that through its new agreement with R1 it will achieve approximately$5 million of cost savings and$5 million of improved net patient revenues over the last half of 2019. Beyond 2019, the Company expects the annual impact of the R1 partnership to grow to$50 million by 2021.
Financial Outlook
The Company is reiterating its previously established financial outlook. The Company’s guidance takes into account the expected financial impact of its partnership with R1 RCM.
(In Millions) | 2018 Actual |
2019 Guidance |
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Same-facility net operating revenues | |
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Same-facility Adjusted EBITDA | |
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These projections are based on the Company’s historical operating performance, current economic, demographic and regulatory trends and other assumptions that the Company believes are reasonable at this time. See “Forward-Looking Statements” below for a list of factors that could affect the future financial and operating results of the Company or the healthcare industry generally.
A reconciliation of the Company’s projected 2019 Adjusted EBITDA, a forward-looking non-GAAP financial measure, to net income (loss), the most directly comparable
About
The principal business of
The Company’s headquarters are located in
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) | |||||||||||||||||||
(In Thousands, Except Earnings per Share and Shares) | |||||||||||||||||||
Three Months Ended |
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2019 | 2018 | ||||||||||||||||||
% of | % of | ||||||||||||||||||
$ Amount | Revenues | $ Amount | Revenues | ||||||||||||||||
Net operating revenues | $ | 442,805 | 100.0 | % | $ | 486,820 | 100.0 | % | |||||||||||
Operating costs and expenses: | |||||||||||||||||||
Salaries and benefits | 225,075 | 50.8 | % | 247,000 | 50.7 | % | |||||||||||||
Supplies | 51,385 | 11.6 | % | 58,886 | 12.1 | % | |||||||||||||
Other operating expenses | 136,789 | 30.9 | % | 152,738 | 31.3 | % | |||||||||||||
Depreciation and amortization | 14,639 | 3.3 | % | 18,261 | 3.8 | % | |||||||||||||
Lease costs and rent | 11,531 | 2.6 | % | 12,532 | 2.6 | % | |||||||||||||
Electronic health records incentives | 26 | — | % | (141 | ) | — | % | ||||||||||||
Legal, professional and settlement costs | 685 | 0.2 | % | 3,413 | 0.7 | % | |||||||||||||
Impairment of long-lived assets and goodwill | 8,860 | 2.0 | % | 39,760 | 8.2 | % | |||||||||||||
Loss (gain) on sale of hospitals, net | — | — | % | 7,815 | 1.6 | % | |||||||||||||
Loss on closure of hospitals, net | — | — | % | 13,746 | 2.8 | % | |||||||||||||
Total operating costs and expenses | 448,990 | 101.4 | % | 554,010 | 113.8 | % | |||||||||||||
Income (loss) from operations | (6,185 | ) | (1.4 | )% | (67,190 | ) | (13.8 | )% | |||||||||||
Interest expense, net | 32,266 | 7.3 | % | 30,931 | 6.4 | % | |||||||||||||
Income (loss) before income taxes | (38,451 | ) | (8.7 | )% | (98,121 | ) | (20.2 | )% | |||||||||||
Provision for (benefit from) income taxes | 155 | — | % | 366 | — | % | |||||||||||||
Net income (loss) (a) | (38,606 | ) | (8.7 | )% | (98,487 | ) | (20.2 | )% | |||||||||||
Less: Net income (loss) attributable to noncontrolling interests |
400 | 0.1 | % | 481 | 0.1 | % | |||||||||||||
Net income (loss) attributable to |
$ | (39,006 | ) | (8.8 | )% | $ | (98,968 | ) | (20.3 | )% | |||||||||
Earnings (loss) per share attributable to |
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Basic and diluted (b) | $ | (1.33 | ) | $ | (3.48 | ) | |||||||||||||
Weighted-average shares outstanding: | |||||||||||||||||||
Basic and diluted | 29,438,015 | 28,454,336 | |||||||||||||||||
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UNAUDITED CONSOLIDATED SELECTED OPERATING DATA | |||||||||||||||
Three Months Ended |
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2019 | 2018 | Variance | % Variance | ||||||||||||
Consolidated: | |||||||||||||||
Number of licensed beds at end of period (c) | 2,604 | 2,675 | (71 | ) | (2.7 | )% | |||||||||
Admissions (d) | 17,755 | 20,549 | (2,794 | ) | (13.6 | )% | |||||||||
Adjusted admissions (e) | 43,304 | 49,226 | (5,922 | ) | (12.0 | )% | |||||||||
Surgeries (f) | 16,723 | 20,587 | (3,864 | ) | (18.8 | )% | |||||||||
Emergency room visits (g) | 132,125 | 153,797 | (21,672 | ) | (14.1 | )% | |||||||||
Medicare case mix index (h) | 1.47 | 1.44 | 0.03 | 2.1 | % | ||||||||||
Same-facility: (i) | |||||||||||||||
Number of licensed beds at end of period (c) | 2,604 | 2,630 | (26 | ) | (1.0 | )% | |||||||||
Admissions (d) | 17,755 | 19,174 | (1,419 | ) | (7.4 | )% | |||||||||
Adjusted admissions (e) | 43,304 | 45,525 | (2,221 | ) | (4.9 | )% | |||||||||
Surgeries (f) | 16,723 | 18,301 | (1,578 | ) | (8.6 | )% | |||||||||
Emergency room visits (g) | 132,125 | 139,226 | (7,101 | ) | (5.1 | )% | |||||||||
Medicare case mix index (h) | 1.47 | 1.43 | 0.04 | 2.8 | % | ||||||||||
Three Months Ended |
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2019 | 2018 | $ Variance | % Variance | |||||||||||||||
Consolidated: | ||||||||||||||||||
Net patient revenues | $ | 422,182 | $ | 464,596 | $ | (42,414 | ) | (9.1 | )% | |||||||||
Non-patient revenues | 20,623 | 22,224 | (1,601 | ) | (7.2 | )% | ||||||||||||
Total net operating revenues | $ | 442,805 | $ | 486,820 | $ | (44,015 | ) | (9.0 | )% | |||||||||
Net patient revenues per adjusted admission | $ | 9,749 | $ | 9,438 | $ | 311 | 3.3 | % | ||||||||||
Net operating revenues per adjusted admission | $ | 10,225 | $ | 9,889 | $ | 336 | 3.4 | % | ||||||||||
Same-facility: | ||||||||||||||||||
Net patient revenues | $ | 424,408 | $ | 439,796 | $ | (15,388 | ) | (3.5 | )% | |||||||||
Non-patient revenues | 20,620 | 21,798 | (1,178 | ) | (5.4 | )% | ||||||||||||
Total net operating revenues | $ | 445,028 | $ | 461,594 | $ | (16,566 | ) | (3.6 | )% | |||||||||
Net patient revenues per adjusted admission | $ | 9,800 | $ | 9,661 | $ | 139 | 1.4 | % | ||||||||||
Net operating revenues per adjusted admission | $ | 10,276 | $ | 10,139 | $ | 137 | 1.3 | % | ||||||||||
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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
(In Thousands, Except Par Value per Share and Shares) | |||||||||||
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2019 | 2018 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 1,716 | $ | 3,203 | |||||||
Patient accounts receivable | 326,639 | 322,608 | |||||||||
Inventories | 43,593 | 45,646 | |||||||||
Prepaid expenses | 17,919 | 19,683 | |||||||||
Due from third-party payors | 67,748 | 63,443 | |||||||||
Current assets of hospitals held for sale | 2,286 | — | |||||||||
Other current assets | 32,303 | 36,405 | |||||||||
Total current assets | 492,204 | 490,988 | |||||||||
Property and equipment, net | 537,424 | 559,438 | |||||||||
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398,148 | 401,073 | |||||||||
Intangible assets, net | 46,577 | 48,289 | |||||||||
Operating lease right-of-use assets | 89,638 | — | |||||||||
Long-term assets of hospitals held for sale | 14,504 | — | |||||||||
Other long-term assets | 68,852 | 74,306 | |||||||||
Total assets | $ | 1,647,347 | $ | 1,574,094 | |||||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities: | |||||||||||
Current maturities of long-term debt | $ | 1,721 | $ | 1,697 | |||||||
Current portion of operating lease liabilities | 24,670 | — | |||||||||
Accounts payable | 147,084 | 143,917 | |||||||||
Accrued liabilities: | |||||||||||
Accrued salaries and benefits | 83,308 | 76,908 | |||||||||
Accrued interest | 22,061 | 10,024 | |||||||||
Due to third-party payors | 45,736 | 45,852 | |||||||||
Current liabilities of hospitals held for sale | 1,205 | — | |||||||||
Other current liabilities | 40,272 | 43,336 | |||||||||
Total current liabilities | 366,057 | 321,734 | |||||||||
Long-term debt | 1,194,321 | 1,191,777 | |||||||||
Long-term operating lease liabilities | 65,687 | — | |||||||||
Deferred income tax liabilities, net | 6,947 | 6,736 | |||||||||
Long-term liabilities of hospitals held for sale | 2,414 | — | |||||||||
Other long-term liabilities | 123,772 | 126,499 | |||||||||
Total liabilities | 1,759,198 | 1,646,746 | |||||||||
Redeemable noncontrolling interests | 2,278 | 2,278 | |||||||||
Equity: | |||||||||||
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Preferred stock, |
— | — | |||||||||
Common stock, |
3 | 3 | |||||||||
Additional paid-in capital | 558,498 | 557,309 | |||||||||
Accumulated other comprehensive income (loss) | 808 | 759 | |||||||||
Accumulated deficit | (688,198 | ) | (648,464 | ) | |||||||
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(128,889 | ) | (90,393 | ) | |||||||
Nonredeemable noncontrolling interests | 14,760 | 15,463 | |||||||||
Total equity (deficit) | (114,129 | ) | (74,930 | ) | |||||||
Total liabilities and equity | $ | 1,647,347 | $ | 1,574,094 | |||||||
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
(In Thousands) | |||||||||||
Three Months Ended |
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2019 | 2018 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | (38,606 | ) | $ | (98,487 | ) | |||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
Depreciation and amortization | 14,639 | 18,261 | |||||||||
Non-cash interest expense, net | 1,939 | 1,811 | |||||||||
Provision for (benefit from) deferred income taxes | 90 | 536 | |||||||||
Stock-based compensation expense | 1,770 | 2,464 | |||||||||
Impairment of long-lived assets and goodwill | 8,860 | 39,760 | |||||||||
Loss (gain) on sale of hospitals, net | — | 7,815 | |||||||||
Non-cash portion of loss (gain) on hospital closures | (567 | ) | 5,305 | ||||||||
Changes in reserves for self-insurance claims, net of payments | 4,160 | 6,025 | |||||||||
Other non-cash expense (income), net | (1,372 | ) | (49 | ) | |||||||
Changes in operating assets and liabilities, net of acquisitions and divestitures: | |||||||||||
Patient accounts receivable, net | (3,986 | ) | 1,429 | ||||||||
Due from and due to third-party payors, net | (4,421 | ) | 1,217 | ||||||||
Inventories, prepaid expenses and other current assets | 4,911 | 1,290 | |||||||||
Accounts payable and accrued liabilities | 20,146 | 9,587 | |||||||||
Long-term assets and liabilities, net | 515 | 443 | |||||||||
Net cash provided by (used in) operating activities | 8,078 | (2,593 | ) | ||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures for property and equipment | (8,292 | ) | (14,528 | ) | |||||||
Capital expenditures for software | (1,191 | ) | (513 | ) | |||||||
Acquisitions, net of cash acquired | (455 | ) | (32 | ) | |||||||
Proceeds from the sale of hospitals | — | 38,663 | |||||||||
Other investing activities, net | 1,729 | 197 | |||||||||
Net cash provided by (used in) investing activities | (8,209 | ) | 23,787 | ||||||||
Cash flows from financing activities: | |||||||||||
Borrowings under revolving credit facilities | 152,000 | 132,000 | |||||||||
Repayments under revolving credit facilities | (150,000 | ) | (114,000 | ) | |||||||
Borrowings of long-term debt | 161 | 12 | |||||||||
Repayments of long-term debt | (1,833 | ) | (627 | ) | |||||||
Payments of debt issuance costs | — | (2,268 | ) | ||||||||
Cancellation of restricted stock awards for payroll tax withholdings on vested shares | (461 | ) | (634 | ) | |||||||
Cash distributions to noncontrolling investors | (1,223 | ) | (803 | ) | |||||||
Net cash provided by (used in) financing activities | (1,356 | ) | 13,680 | ||||||||
Net change in cash, cash equivalents and restricted cash | (1,487 | ) | 34,874 | ||||||||
Cash, cash equivalents and restricted cash at beginning of period | 3,203 | 5,617 | |||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 1,716 | $ | 40,491 | |||||||
FOOTNOTES TO UNAUDITED FINANCIAL STATEMENTS AND SELECTED OPERATING DATA
(a) EBITDA is a non-GAAP financial measure that consists of net income (loss) before interest, income taxes, depreciation and amortization. Adjusted EBITDA, also a non-GAAP financial measure, is EBITDA adjusted to add back the effect of certain legal, professional and settlement costs, impairment of long-lived assets and goodwill, net loss (gain) on sale of hospitals, net loss on closure of hospitals, transition of transition services agreements (“TSAs”) and post-spin headcount reductions and executive severance. The Company uses Adjusted EBITDA as a measure of financial performance. Adjusted EBITDA is a key measure used by the Company’s management to assess the operating performance of its hospital operations business and to make decisions on the allocation of resources. Additionally, management utilizes Adjusted EBITDA in assessing the Company’s results of operations and in comparing the Company’s results of operations between periods. Same-facility Adjusted EBITDA, also a non-GAAP financial measure, is further adjusted to exclude the effect of EBITDA of hospitals either sold or closed as of
Adjusted EBITDA and Same-facility Adjusted EBITDA are not measurements of financial performance under
The following table reconciles Adjusted EBITDA and Same-facility Adjusted EBITDA, each as defined above, to net income (loss), the most directly comparable
Three Months Ended |
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2019 | 2018 | ||||||||||
Net income (loss) | $ | (38,606 | ) | $ | (98,487 | ) | |||||
Interest expense, net | 32,266 | 30,931 | |||||||||
Provision for (benefit from) income taxes | 155 | 366 | |||||||||
Depreciation and amortization | 14,639 | 18,261 | |||||||||
EBITDA | 8,454 | (48,929 | ) | ||||||||
Legal, professional and settlement costs | 685 | 3,413 | |||||||||
Impairment of long-lived assets and goodwill | 8,860 | 39,760 | |||||||||
Loss (gain) on sale of hospitals, net | — | 7,815 | |||||||||
Loss on closure of hospitals, net | — | 13,746 | |||||||||
Transition of transition services agreements | 1,142 | 717 | |||||||||
Post-spin headcount reductions and executive severance | 1,490 | 1,898 | |||||||||
Adjusted EBITDA | 20,631 | 18,420 | |||||||||
Negative EBITDA of divested hospitals | 2,874 | 8,646 | |||||||||
Same-facility Adjusted EBITDA | $ | 23,505 | $ | 27,066 | |||||||
(b) The following table reconciles net income (loss) attributable to
Three Months Ended |
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2019 | 2018 | ||||||||||
(per share - basic and diluted) | |||||||||||
Earnings (loss) per share attributable to |
$ | (1.33 | ) | $ | (3.48 | ) | |||||
Adjustments: | |||||||||||
Legal, professional and settlement costs | 0.02 | 0.12 | |||||||||
Impairment of long-lived assets and goodwill | 0.30 | 1.40 | |||||||||
Loss (gain) on sale of hospitals, net | — | 0.28 | |||||||||
Loss on closure of hospitals, net | — | 0.48 | |||||||||
Transition of transition services agreements | 0.04 | 0.03 | |||||||||
Post-spin headcount reductions and executive severance | 0.05 | 0.07 | |||||||||
Net operating losses of divested hospitals | 0.10 | 0.30 | |||||||||
Earnings (loss) per share attributable to |
$ | (0.82 | ) | $ | (0.80 | ) | |||||
(c) Licensed beds are the number of beds for which the appropriate state agency licenses a hospital, regardless of whether the beds are actually available for patient use.
(d) Admissions represent the number of patients admitted for inpatient services.
(e) Adjusted admissions are computed by multiplying admissions by gross patient revenues and then dividing that number by gross inpatient revenues.
(f) Surgeries represent the number of inpatient and outpatient surgeries.
(g) Emergency room visits represent the number of patients registered and treated in the Company’s emergency rooms.
(h) Medicare case mix index is a relative value assigned to a diagnosis-related group of patients that is used in determining the allocation of resources necessary to treat the patients in that group. Medicare case mix index is calculated as the average case mix index for all Medicare admissions during the period.
(i) Same-facility financial and operating data excludes hospitals that were sold or closed prior to and as of the end of the current reporting period. Same-facility operating results have been adjusted to exclude the operating results of
Forward-Looking Statements
The terms “QHC,” “Quorum Health,” “the Company,” “we,” “us” or “our” refer to
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 that involve risk and uncertainties. All statements in this press release other than statements of historical fact, including statements regarding projections, expected operating results, and other events that depend upon or refer to future events or conditions or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” “thinks,” “outlook,” and similar expressions, are forward-looking statements. Although the Company believes that these forward-looking statements are based on reasonable assumptions, these assumptions are inherently subject to significant economic and competitive uncertainties and contingencies, which are difficult or impossible to predict accurately and may be beyond the control of the Company. Accordingly, the Company cannot give any assurance that its expectations will in fact occur and cautions that actual results may differ materially from those in the forward-looking statements. A number of factors could affect the future results of the Company or the healthcare industry generally and could cause the Company’s expected results to differ materially from those expressed in this press release.
These factors include, but are not limited to, the following:
- general economic and business conditions, both nationally and in the regions in which we operate;
- risks associated with our substantial indebtedness, leverage and debt service obligations, including our ability to comply with our debt covenants, including our senior credit facility, as amended;
- our ability to successfully complete divestitures and the timing thereof, our ability to complete any such divestitures on desired terms or at all, and our ability to realize the intended benefits from any such divestitures;
- changes in reimbursement methodologies and rates paid by federal or state healthcare programs, including Medicare and Medicaid, or commercial payors, and the timeliness of reimbursement payments, including delays in certain states in which we operate;
- the extent to which regulatory and economic changes occur in
Illinois , where a material portion of our revenues are concentrated; - demographic changes;
- the impact of changes made to the Affordable Care Act, the potential for repeal or additional changes to the Affordable Care Act, its implementation or its interpretation, as well as changes in other federal, state or local laws or regulations affecting the healthcare industry;
- increases in the amount and risk of collectability of patient accounts receivable, including lower collectability levels which may result from, among other things, self-pay growth and difficulties in collecting payments for which patients are responsible, including co-pays and deductibles;
- competition;
- changes in medical or other technology;
- any potential impairments in the carrying values of long-lived assets and goodwill or the shortening of the useful lives of long-lived assets;
- the costs associated with the transition of the transition services agreements (“TSAs”) with CHS, as well as the additional costs and risks associated with any operational problems, delays in collections from payors, and errors and control issues during the termination and transition process, and our ability to realize the intended benefits from transitioning the transition services agreements;
- the impact of certain outsourcing functions, and the ability of CHS, as current provider of our billing and collection services pursuant to the SSC TSA, and R1 RCM, as future provider of our revenue cycle management services, to timely and appropriately bill and collect;
- our ability to manage effectively our arrangements with third-party vendors for key non-clinical business functions and services;
- our ability to achieve operating and financial targets and to control the costs of providing services if patient volumes are lower than expected;
- our ability to achieve and realize the operational and financial benefits expected from our margin improvement program;
- the effects related to outbreaks of infectious diseases;
- our ability to attract and retain, at reasonable employment costs, qualified personnel, key management, physicians, nurses and other healthcare workers;
- the impact of seasonal or severe weather conditions or earthquakes;
- increases in wages as a result of inflation or competition for highly technical positions and rising medical supply and drug costs due to market pressure from pharmaceutical companies and new product releases;
- our ongoing ability to maintain and utilize certified EHR technology;
- the efforts of healthcare insurers, providers, large employer groups and others to contain healthcare costs, including the trend toward treatment of patients in less acute or specialty healthcare settings and the increased emphasis on value-based purchasing;
- the failure to comply with governmental regulations;
- our ability, where appropriate, to enter into, maintain and comply with provider arrangements with payors and the terms of these arrangements, which may be impacted by the increasing consolidation of health insurers and managed care companies and vertical integration efforts involving payors and healthcare providers;
- the potential adverse impact of known and unknown government investigations, internal investigations, audits, and federal and state false claims act litigation and other legal proceedings, including the shareholder and creditor litigations against our company and certain of our officers and directors and threats of litigation, as well as the significant costs and attention from management required to address such matters;
- liabilities and other claims asserted against us, including self-insured malpractice claims;
- the impact of cyber-attacks or security breaches, including, but not limited to, the compromise of our facilities and confidential patient data, potential harm to patients, remediation and other expenses, potential liability under the Health Insurance Portability and Accountability Act of 1996, or HIPAA, and consumer protection laws, federal and state governmental inquiries, and damage to our reputation;
- our ability to utilize our income tax loss carryforwards;
- our ability to maintain certain accreditations at our facilities;
- the success and long-term viability of healthcare insurance exchanges and potential changes to the beneficiary enrollment process;
- the extent to which states support or implement changes to Medicaid programs, utilize healthcare insurance exchanges or alter the provision of healthcare to state residents through regulation or otherwise;
- the timing and amount of cash flows related to the
California Hospital Quality Assurance Fee (“HQAF”) program, as well as the potential for retroactive adjustments for prior year payments; - the effects related to the continued implementation of the sequestration spending reductions and the potential for future deficit reduction legislation;
- changes in
U.S. generally accepted accounting principles, including the impacts of adopting newly issued accounting standards; - the availability and terms of capital to fund capital expenditures;
- our ability to obtain adequate levels of professional and general liability and workers’ compensation liability insurance; and
- the other risk factors set forth in the Company’s other public filings with the
Securities and Exchange Commission .
Although we believe that these forward-looking statements are based upon reasonable assumptions, these assumptions are inherently subject to significant regulatory, economic and competitive uncertainties and contingencies, which are difficult or impossible to predict accurately and may be beyond our control. Accordingly, we cannot give any assurance that our expectations will in fact occur and caution that actual results may differ materially from those in the forward-looking statements. Given these uncertainties, prospective investors are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements are made as of the date of this filing. We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.
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Source:
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