Essay on Financial Analysis on Community Health Systems

Essay on Financial Analysis on Community Health Systems

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The Community Health Systems (CHS) is one of the largest healthcare group in the United States with over 135 hospitals in 29 states and in England [1], with approximately 20,000 beds [2]. CHS serves more than 55% of the market with most affiliated hospitals being the only healthcare provider. While closing the accounts on 31st December 2012, the company had under its belt 162 hospitals out of which there were 156 general, acute care hospitals, 5 psychiatric hospitals and one rehabilitation center with 41,198 beds. CHS also operates 112 surgical centers Most of the centers provides high end services with well trained medical staff [3].
Community Health Systems started in 1985 and in the short period of 35 years has grown to become one of the largest healthcare group in the States. The company went public in June 2000 at $13 a share. The companies biggest growth phase occurred in 2007 when they acquired Triad Group of Hospitals, which gave the strength of additional 50 hospitals to Community Health Systems name. The fortune 500 had ranked community health systems as #198 in 2012 [4] and #184 in 2013 only second to HCA in the healthcare providers industry [5]. The Community Health Systems has 90,000 staff with a management experience of over 23 years each. The CHS business strategy is very simple but Industry analysts often say that it is effective.
The revenue of the healthcare industry unlike any other depends on the inpatient occupancy or ALOS(average length of stay), the volume of outpatient visits and procedures, the services ordered for the inpatients and outpatient. For CHS the majority of its revenue comes from Managed care and other insurers ( apart from govt. insurance) with 54.5%, after which comes the gover...

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... the company. There is also a high return on investment. It remains to see how the pay per performance (PPO), which is paying for the quality of care is set to affect the industry, but present medical treatments and quality of care suggests that PPO is unlikely to affect Community Health Services.
The Industry is one of the most complicated and there are some implications that are uncertain. However, if the Obamacare gets sanctioned, then healthcare is a good industry to invest in and CHS would not be a bad choice as it has a right mix to everything. The company is a good long term investment. The problem with the industry is the changing rules of the government. I wouldn’t go far as to say this is an investors dream, but it is certainly a safe bet and so it would be better for risk takers to find some other industry while keeping a safe stock at CHS.

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