Community Health Systems Incorporation

CommunityHealth Systems Incorporation


CommunityHealth Systems Incorporation



CHShas in the recent years recorded an impressive growth manifested intheir books of account and especially so after the acquisition of HMAInc. another giant health service provider in the United States. Forinstance, a report released on Feb 19 2015 by the company managementrevealed that the net operating revenues between September andDecember 2014 amounted to $4.918 billion, which represented a 54.1 %increase from $3.191 billion in 2013. Additionally, the number ofcurrent shareholders rose to $129 million relative to $38 million in2013. The company has been on an upward trend culminating in revenueof $12998 by the end of 2013 (see figure 1.0 below).

Figure1.0:CHS Revenue Growth.

Adoptedfrom CHS (,accessed on 25thJune2015)

Accordingto the report, the results for the final quarter of 2014 included$0.01 per share compared to the overhead expenses from theacquisition of HMA. Without including the expenses related to themerger and acquisition of HMA, proceeds from the business wasestimated to $1.23 per share. Net income attributable to CommunityHealth Systems, Inc. common stockholders further rose to $0.87 pershare (NASDAQ, 2015). An analysis of the financial position ofCommunity Health Systems Inc. reveals that the company has positivegrowth prospects going forward. (More information in Appendix I &ampII).

HumanResource Aspects

CHSis one of the biggest health system service providers in the UnitedStates with 22000 physicians, 3500 of whom are officially employed bythe Community Health Systems Inc. In general, the corporation hasemployed over 130 000 employees. The corporation undertakes trainingand education of employees especially at the entry level stages toequip them with necessary skills to deliver high quality services topatients. According to the CHS codes of conduct(,accessed on 26thJune 2015), the company endeavors to provide equal opportunity to itsemployees regardless of disability, gender, origin, citizenship, raceand religion (p. 7). Moreover, CHS Inc. is an equal opportunityemployer and the remuneration and compensation packages provided areamong the best in the industry in the United States according to CHS(,accessed on 26thJune 2015). CHS seems to be on course on matters human resource sinceit has been ascertained that a combination of good remunerationpackages and respect for individualism results in productivity(Arthur, 1994).

Technologyand Information Systems

Toretain its business relevance in the dynamic industry, CHS Inc. hasespoused itself as one of the most advanced health service providersin the use of technology in their daily operations. CHS uses theElectronic Health Record (EHR) to store patient information. The CHSElectronic Health Records system is even complete with recurringalerts, which serve to remind physicians of prescription schedules,referrals to be tracked, and tests performances. It became overtlynecessary to secure and frequently collateralize the patientinformation in CHS after August 18, 2014 when hackers broke into CHSsystem and stole data belonging to about 4.5million patients. Additionally, CHS uses the Computerized Physician Order Entry (CPOE).This particularly makes CHS an effective health service providerrelative to other health service providers since the ComputerizedPhysician Order Entry had been used in several applications before,tested and found to reduce errors related to medication by over 80%(Bates et al, 1998).


Theoperational decisions of CHS are coordinated in such a way that thedecisions arrived at by the top management which includes thehospital heads enable the employees and the CHS associates toautomate and even mechanize recurrent medication tasks that impact onthe business performance in line with the CHS sustainability policy(Community Health System, 2015). The management structuresdecision-making criteria with patient-centered operational elementsthat simultaneously serve to motivate the employees and empower themto cope with dynamic medical scenarios while undertaking their roles.CHS apparently crafts a kind of win-win operational decisions andthis kind of strategizing have been established as very critical forgrowth-oriented entities (Kay, 1995). The organization does as muchuse predictive analytics from its research and development (R&ampD)section and annual releases of the United States Departmentof Health and Human Service toforecast the business strategies that can be employed to countercompetition in the industry, which continues to attract new entrants.This strategy seems to have informed the mergers and acquisitionsundertaken by CHS between 2003 and 2014.


CompanyMission and objective

CHShas as is mission ingrained in a dedication to providingcompassionate, high quality and affordable patient-centered care withspecial attention to the poor and undeserved. CHS wants to be thebest health care entity offering the ultimate health services to all.

GenericCompetitive strategy

Themajor competitive strategy employed by CHS in the ever-dynamic UnitedStates health sector is through mergers and acquisition. The recentgrowth of the company as far as profits and revenues are concernedhas been attributed to this strategy. The company has over the last12 years made landmark acquisitions that have propelled it to itscurrent growth prospects. In 2003, CHS acquired South Side RegionalMedical Center thereby broadening its network in the southern states.In July 2007, the company bought yet another giant company, theMcKenzie-Williamte and the Triad Hospitals in general. Thistransaction alone added 50 hospitals to CHS Inc. The recent and mosttalked about acquisition by CHS is the pursuant and subsequentacquisition of Health Management Associates (HMA) a process completedin 2014 at an estimated cost of $3.6 billion (CHS, 2015). The outcomeof the acquisition had implications for the entire health sector asit made CHS the largest health service provider by profits andhospitals operated since it added 70 hospitals to Community HealthSystems Inc.

CHSPortfolios: Management Consulting &amp Patient Care.

CHShas all its business lines in the health sector. The major portfoliosof CHS Inc. include management and consulting on one side and thein-patient and outpatient services. Management consulting came as anew dimension after the acquisition of QuorumHealth Care Resource before which CHS only offeredthe in-patient and out-patient services.The two portfolios are related since the consultation services areprovided to patients in the CHS hospitals as well as independenthospitals. Moreover, the issues that inform the subjects ofconsultation relate to the in-patient and outpatient services in oneway or the other. What’s more, it is the medical practitioners whodouble up as consultants. Therefore, the portfolios of CHS, which aresquarely in the health sector, are highly correlated.

Companystructure vis-à-vis corporate strategies

CHSis the leading non-urban provider of health services with 199hospitals spread across 29 states in the United States. Given thenetwork of hospitals operated by the company, and especially thebrand that comes with CHS, it has become increasingly easy for CHS tomerge with and subsequently acquire several competitive and strategichospital chains in the same industry. The company growth strategy ismajorly through mergers and acquisition, it has been able to do thislargely based on a combination of brand name, financial muscle andnetwork. The company structure and its business strategies have beena formidable force that has propelled CHS Inc. to the apex.


Arthur,J. B. (1994). Effects of human resource systems on manufacturingperformance and turnover. Academyof Management journal,37(3),670-687.

Bates,D. W., Leape, L. L., Cullen, D. J., Laird, N., Petersen, L. A.,Teich, J. M., … &amp Seger, D. L. (1998). Effect of computerizedphysician order entry and a team intervention on prevention ofserious medication errors. Jama,280(15),1311-1316.

CommunityHealth System (2015). Company Financials. CHS.Viewed on June 26, 2015 at3.56pm&lt

CommunityHealth System (2015). History. CHS.Viewed on June 26, 2015 at2.46pm,&lt

Kay,J. (1995). Foundationsof corporate success: how business strategies add value.Oxford University Press.

NASDAQ(2015). CYS Invesments Inc. Viewed on June 26, 2015 at 4.16pm&lt &gt

Appendix1:CHS Balance Sheet.

Adoptedfrom CHS (,accessed on 25thJune2015)

AppendixII:CHS Gross Profit Trends (2009-2014).

Adoptedfrom CHS (,accessed on 25thJune2015)