Dive Brief:
- Community Health Systems saw a marked drop in earnings for the third quarter of this year, reporting net income of $4.1 million, as compared with $44.2 million for the same period last year.
- Net income from continuing operations fell from $55.8 million for Q3 '12 to $21.6 million for the third quarter this year, a 63.3% drop.
- Factors influencing the drop included CHS's setting aside $98 million fo cover an expected DoJ settlement over its practices for short-stay Medicare admissions from the emergency department.
Dive Insight:
This kind of performance is never a good thing, but CHS is far from down and out. If its planned $7.6 billion merger with Health Management Associates goes through, CHS will have the kind of scale it needs to improve efficiency and widen profit margins once again. The merger does have to pass FTC scrutiny, but CHS projects that the FTC will issue its ruling in just a few months, in the first quarter of 2014.