Quorum Health's losses top $200M in 2018
- Quorum Health reported a $200.2 million loss for the last calendar year, 75% larger than its $114.2 million loss in 2017.
- Net operating revenue totaled $1.88 billion, down 9.3% from $2.07 billion the previous year — reflecting the Brentwood, Tennessee-based company's recent downsizing. During the year, Quorum divested three hospitals and closed another one.
- For the three months ended Dec. 31, revenue slid 12% year over year to $458.6 million, and same-facility admissions dropped 1.1% versus the fourth quarter of 2017.
Like many health systems, Quorum is seeking to stabilize its ship against rough financial headwinds and is shedding hospitals to reduce its debt. Thus far, the company has collected about $87 million in proceeds from hospital sales and has indicated plans to sell an additional $215 million in assets by the end of this year.
In the third quarter, Quorum tightened its belt further, laying off 120 employees and 22 doctors and discontinuing four service lines. The 27-hospital system also exited or renegotiated several managed care contracts.
Quorum attributed the decline in same-facility net patient revenues during the fourth quarter to lower volumes as a result of those actions.
The austerity moves seem to be helping. Quorum reported net loss for the fourth quarter of $20.7 million, down from $26.8 million the previous year. Adjusted EBITDA was $37.5 million for the quarter and $126.4 million for the year, down from $49 million and $141.8 million, respectively.
"Over the course of 2018, we significantly improved our EBITDA margins through targeted efficiency initiatives, and divested three hospitals, which brought us closer to our refinancing goal," Quorum President and CEO Robert Fish said in a statement included in the financial report filed with the Securities and Exchange Commission. "In addition, we have strengthened our management team by adding experienced leadership in many key areas of our business."
Since spinning off from Community Health Systems in 2016, Quorum has sold 10 hospitals. A definitive agreement to sell Scenic Mountain Medical Center in Big Spring, Texas, is expected to close by the end of April, with more divestitures planned by the end of the year.
- Becker's Hospital CFO Report Quorum sees annual loss swell to $200M, plans to divest more hospitals