By MATT BLOIS
The Franklin based hospital chain Quorum Health Corporation had lower admissions and revenue during the first quarter of 2019 compared to the previous year.
Executives from the company said the lower first quarter numbers were due in large part to cost cutting initiatives that started last year. The company plans to continue cutting costs in 2019.
Quorum earned $443 million in revenue, down about 9% from the first quarter of 2018. The company reported $39 million in net losses, smaller than the $99 million loss it reported last year.
“While seasonally soft volumes, as well as certain market specific circumstances dampened our results, this trend has abated and appears confined to the first quarter,” CEO Robert Fish said, according to a press release.
Last year, Quorum started eliminating unprofitable services or contracts, it also fired some underperforming physicians. Those changes, along with a mild flu season, reduced admissions.
Admissions to the current hospital portfolio was down about 7%, but the company’s operating costs were down almost 20% compared to the previous year.
The cost cutting isn’t over. Fish said the company had identified an additional $20 million of costs cuts that it plans to start implementing in the second quarter. About half of those cuts will be carried out in 2019.
Last week, Quorum also announced that it signed a contract with a company to carry out some back office services previously handled by Community Health Systems, Quorum’s former parent company.
When Quorum spun off from CHS in 2016, the companies agreed that CHS would provide some services including billing, IT support and payroll. But Quorum claimed that CHS was charging too much.
Fish said this contract was part of Quorum’s plan to exit some of those agreements.
Quorum is still planning to trim its hospital portfolio, but didn’t announce the sale of any new facilities. The company currently operates 27 hospitals.
The company hired two advertising advisors who are “aggressively marketing” 10 hospitals. Fish said the company is evaluating proposals on eight facilities.
According to an investor presentation, the company hopes to pare that down to 18 to 20 hospitals. The company hopes to earn $125 to $175 million from hospital sales in 2019.
In addition, one of the company’s goals in 2019 is to refinance some of its debt to save money on interest.