Community Health Systems 2015 Annual Report Download - page 14

PART I
Item 1. Business of Community Health Systems, Inc.
Overview of Our Company
We are one of the largest publicly-traded hospital companies in the United States and a leading operator of
general acute care hospitals in communities across the country. We were originally founded in 1986 and were
reincorporated in 1996 as a Delaware corporation. We provide healthcare services through the hospitals that we
own and operate and affiliated businesses in non-urban and selected urban markets throughout the United States.
As of December 31, 2015, we owned or leased 194 hospitals included in continuing operations, comprised of 190
general acute care hospitals and four stand-alone rehabilitation or psychiatric hospitals. These hospitals are
geographically diversified across 28 states, with an aggregate of 29,853 licensed beds. We generate revenues by
providing a broad range of general and specialized hospital healthcare services and other outpatient services to
patients in the communities in which we are located. Services provided through our hospitals and affiliated
businesses include general acute care, emergency room, general and specialty surgery, critical care, internal
medicine, obstetrics, diagnostic, psychiatric and rehabilitation services. We also provide additional outpatient
services at urgent care centers, occupational medicine clinics, imaging centers, cancer centers, ambulatory
surgery centers and home health and hospice agencies. An integral part of providing these services is our
relationship and network of affiliated physicians at our hospitals and affiliated businesses. As of December 31,
2015, we employed approximately 3,400 physicians and an additional 1,000 licensed healthcare practitioners.
Through our management and operation of these businesses, we provide standardization and centralization of
operations across key business areas; strategic assistance to expand and improve services and facilities;
implementation of patient safety and quality of care improvement programs and assistance in the recruitment of
additional physicians and licensed healthcare practitioners to the markets in which our hospitals are located. In a
number of our markets, we have partnered with local physicians or not-for-profit providers, or both, in the
ownership of our facilities. In addition to our hospitals and related businesses, we also owned and operated 79
licensed home care agencies and 22 licensed hospice agencies as of December 31, 2015, located primarily in
markets where we also operate a hospital. Also, through our wholly-owned subsidiary, Quorum Health
Resources, LLC, or QHR, we provide management and consulting services to non-affiliated general acute care
hospitals located throughout the United States. For the services we provide through hospitals and home care
agencies that we own and operate, we are paid by governmental agencies, private insurers and directly by the
patients we serve. For our management and consulting services, we are paid by the non-affiliated hospitals
utilizing our services. The financial information for our reportable operating segments is presented in Note 15 of
the Notes to our Consolidated Financial Statements included under Item 8 of this Annual Report on Form 10-K,
or Form 10-K.
Our strategy includes growth by acquisition. We generally target hospitals in growing, non-urban and selected
urban healthcare markets for acquisition because of their favorable demographic and economic trends and
competitive conditions. Because non-urban and suburban service areas have smaller populations, there are
generally fewer hospitals and other healthcare service providers in these communities and generally a lower level
of managed care presence in these markets. We believe that communities with smaller populations generally
view the local hospital as an integral part of the community and support less direct competition for hospital-based
services. We believe opportunities exist for skilled, disciplined operators in selected urban markets to create
networks between urban hospitals and non-urban hospitals while improving physician alignment in both those
markets and making it more attractive to managed care. In recent years, our acquisition strategy has also included
acquiring selected physician practices and physician-owned ancillary service providers. Such acquisitions are
executed in markets where we already have a hospital presence and provide an opportunity to increase the
number of affiliated physicians or expand the range of specialized healthcare services provided by our hospitals.
On January 27, 2014, we completed the acquisition of Health Management Associates, Inc., or HMA, for
approximately $7.3 billion, including the assumption of approximately $3.8 billion of indebtedness, which is
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