By MATT BLOIS
The Brentwood hospital chain Quorum Health lost about $17 million in the second quarter of 2019. During the same quarter last year Quorum reported a loss of $26.6 million.
Operating revenues for the current hospital portfolio fell from $458.5 million in the second quarter of 2018 to $442.4 million during the same period this year.
The company attributed a large portion of that decline to two underperforming hospitals it plans to close or sell this year. Quorum also cited a decline in admissions and a decline in surgeries.
On Wednesday, Quorum announced it will be working with the Franklin company MEDHOST to manage electronic health records. The company, which spun off of Community Health Systems in 2016, was already using MEDHOST software at its hospitals. It used the software through an agreement with Community Health Systems.
Following the spin off, CHS had agreements to manage health care records and some other back office services. Over the last few years, Quorum has been transitioning to other companies to provide many of those services.
In 2017, Quorum claimed that CHS was overcharging the company for some of those services and withheld payments. An arbitration panel determined CHS was overcharging for some services, but not others.
Quorum hasn’t reported a profit since the third quarter of 2015. In an attempt to address those losses executives are pruning the company’s hospital portfolio. Quorum announced the sale or closure of two hospitals during the second quarter of 2019.
The company lowered its predicted operating revenues for 2019 because of the hospital divestitures.
“The decisions we’ve made, especially around closing hospitals and service lines, are not easy, but they’re ultimately appropriate and in the best interest of making each market sustainable,” Quorum COO Martin said on a conference call Thursday.
Earlier this year, Quorum executives said they expected to close or sell nine hospitals in 2019. The company now operates 26 hospitals, down from 38 following the CHS spin off.
Executives said they are actively working to sell four hospitals. The plan is to eventually reduce the portfolio to 18 to 20 hospitals.
In addition to selling off hospitals the company is cutting costs. Executives say transitioning back office services away from CHS should save the company millions of dollars over the next several years.
The stock price for Quorum fell 16 percent on Thursday morning following the release of financial results. The company’s stock price has fallen about 60% since August of last year.