With a strong supply chain and confidence in what its physicians have learned about dealing with a pandemic, Community Health Systems appears ready for whatever COVID-19 could have coming around the corner.
That is how executives with the Tennessee-based parent company of Lutheran Health Network came across during a 2020 RBC Capital Markets Global Healthcare Conference presentation as they looked ahead, and also explained how its business was returning after an April slump.
CHS worked closely with physicians when they had to cancel April procedures that were not life-saving, because “we know that patients are more relying on their doctors’ perspectives that it’s safe to come back for care,” Tim Hingtgen, president and chief operating officer, said in the presentation.
“We’ve seen the momentum build week over week throughout the entire month of May,” he said. “Every single one of our markets is now back to some level of elective business. It started out primarily with some outpatient surgery and moved into more inpatient and higher acuity surgeries.”
Last month, the hospital chain had surpassed by mid-May the number of surgeries it had handled for the entire month of April, Hingtgen said.
“We’re very bullish and optimistic as to our ability to bring the business back, in terms of our partnership with our doctors and the patients being ready for that, he said.
CHS facilities have put plenty of safety measures in place, but it has been the doctors who have made patients comfortable with hospital visits again by articulating them, he said.
Lutheran Health Network pandemic measures illustrate important adjustments CHS has made to reduce COVID-19 risks.
It has limited access points and implemented social distancing protocols. It requires staff, visitors, employees and physicians to wear masks, and it screens everyone who walks through its doors, including employees.
It has established non-COVID-19 Care Zones with dedicated staff so it can confine COVID-19 patients to an isolated hospital area with a dedicated provider team.
“The doctors do support the fact that we have a good plan and our supply chains have normalized in terms of adequate and surplus PPE (personal protective equipment),” Hingtgen said.
“Lab testing resources are opening up. As a matter of fact, we do pre-procedure testing in varying degrees by market, based upon the medical staff’s direction, just to check for a COVID positive or COVID negative,” he said.
“We have an in-house proprietary tracker. We still meet every day in our command center. We assess the situation, making sure that our markets are well-fortified and supported as we see perhaps an influx or increase of COVID-19 patients.”
Nationwide efforts to slow the spread of the coronavirus provided hospitals extra time to prepare to deal with the pandemic, and CHS facilities have kept surge preparations in place to make sure they are ready for a mass influx of patients, Hingtgen said.
“If we see something that would make us nervous in terms of the tracker or the pre-operative testing … we would slow down (elective care), obviously,” he said. “We don’t anticipate that, but we believe that we have an obligation to be prepared for it.”
The update painted a more complete picture of what could be ahead for CHS than it was able to provide when it released first-quarter financial results late in April − a time, Hingtgen said, that “there just wasn’t much clarity as to when state governments would allow the restoration of elective care in their hospitals.”
The company reported first-quarter net income of $18 million, or 15 cents per share, up from a loss of $118 million, or $1.04 per share, for the same period last year, on a 10% revenues reduction. Its revenues fell to $3.025 billion from $3.376 billion.
The CHS first quarter would show a loss of $1.59 per share were a change in tax valuation allowance not taken into account, along with other adjustments. Excluding adjustments for the first quarter of 2019 would have resulted in a loss of 53 cents per share.
The change arose from tax benefits related to the release of federal and state valuation allowances on certain interest carryforwards as a result of an increase to the deductible interest expense allowed for 2020 and 2019 under the Coronavirus Aid, Relief and Economic Security Act passed during the first quarter.
CHS saw its first-quarter hospital admissions fall 5% on a same-facility basis, contributing to a 3.5% decline in their net operating revenues, compared with the prior-year period.
“We are all grateful for the courage and commitment of our nation’s healthcare workers as they put the care of their patients above all else in confronting COVID-19,” Wayne Smith, chairman and CEO, said in an earnings report. “Across our hospitals, physicians, nurses, and everyone else on the front lines have helped to save lives.
“Our organization has leveraged its resources to provide a rapid, coordinated and effective response to the pandemic. Now, we are also focused on reopening services where we can, especially for patients who have deferred important surgeries, procedures and other appointments,” he said.
“As we continue to manage our operations through the COVID-19 pandemic, our organization is doing everything possible to limit the spread of COVID-19 and to ensure our communities continue to have access to safe, quality healthcare.”
With the impact of COVID-19 clouding expense and patient volume projections, CHS withdrew early in April the 2020 financial guidance it had released in February.