- Quorum Health's operating revenue declined 9% to $959.9 million in the first half of 2018, down from $1.1 million in the same period a year ago. The slump was primarily due to loss of revenue from seven hospitals divested or closed since the end of the prior period, according to financial results released Thursday.
- A $15.8 million infusion of funds from the California Hospital Quality Assurance Fee program partially offset the revenue drop.
- The Brentwood, Tennessee-based hospital chain ended the half with a net loss of $124.4 million, more than twice the $57.8 million it lost in the first half of 2017, and said it will focus on continuing to restructure to reduce debt and improve its financial outlook.
Like many health systems, Quorum is looking to stabilize itself among difficult financial trends and has turned to selling off hospitals in an effort to chip away at debt.
Since Quorum began unloading hospitals in 2016, it has reaped $84.8 million in net proceeds from divestitures and used $74.9 million of that to pay down debt. The company said it plans to sell another $165 million to $215 million in assets by the end of this year.
As of Wednesday, Quorum had inked a definitive agreement to sell one hospital and signed letters of intent to divest six other facilities. Combined, those transactions would net the health system about $115 million.
For the three months ending June 30, Quorum saw operating revenue drop $57 million year over year to $472.6 million. Net loss of $25.9 million, down from $30.6 million in Q2 2017, was impacted by the closure of one hospital and $4.1 million in severance related to headcount reductions, the company said.
Quorum's six-month performance took a hit from several one-time charges, including $39.8 million in impairment charges. The company, which spun off from Community Health Systems with 38 hospitals in 2016, also cited $17.1 million in costs related to the shuttering of one hospital, plus $8.1 million in losses on the sale of two hospitals and $6 million in severance related to headcount reductions.
The company reduced its full-year guidance from a range of $1.9 billion to $2 billion to $1.9 billion. "The reduction is primarily a result of the Company's continued efforts to execute on its divestiture strategy as well as efforts to improve its operating margins by discontinuing underperforming service lines, managed Medicaid contracts and provider relationships," the company said.
Quorum CEO Thomas Miller stepped down in May. Robert Fish, board chairman of Kennett Square, Pennsylvania-based Genesis Healthcare, is serving as interim CEO. He most recently served as interim CEO of San Diego-based Millennium Health and CEO of Genesis Healthcare.