Community Health Systems 2015 Annual Report Download - page 42

practices and our compliance with federal regulations. The reports we provide in connection with the CIA could
result in greater scrutiny by regulatory authorities. We believe our existing Compliance Program addresses
compliance with the operational terms of the CIA.
Employees and Medical Staff
At December 31, 2015, we had approximately 137,000 employees, including approximately 28,000 part-time
employees. References herein to “employees” refer to employees of our affiliates. We are subject to various state
and federal laws that regulate wages, hours, benefits and other terms and conditions relating to employment. At
December 31, 2015, certain employees at 32 of our hospitals are represented by various labor unions. It is likely
that union organizing efforts will take place at additional hospitals in the future. We consider our employee
relations to be good and have not experienced work stoppages that have materially, adversely affected our
business or results of operations. Our hospitals, like most hospitals, have experienced rising labor costs. In some
markets, nurse and medical support personnel availability has become a significant operating issue to healthcare
providers. To address this challenge, we have implemented several initiatives to improve retention, recruiting,
compensation programs and productivity.
Our hospitals are staffed by licensed physicians, including both employed physicians and physicians who are
not employees of our hospitals. Some physicians provide services in our hospitals under contracts, which
generally describe a term of service, provide and establish the duties and obligations of such physicians, require
the maintenance of certain performance criteria and fix compensation for such services. Any licensed physician
may apply to be accepted to the medical staff of any of our hospitals, but the hospital’s medical staff and the
appropriate governing board of the hospital, in accordance with established credentialing criteria, must approve
acceptance to the staff. Members of the medical staffs of our hospitals often also serve on the medical staffs of
other hospitals and may terminate their affiliation with one of our hospitals at any time.
We may be required to continue to enhance wages and benefits to recruit and retain nurses and other medical
support personnel or to hire more expensive temporary or contract personnel. As a result, our labor costs could
increase. We also depend on the available labor pool of semi-skilled and unskilled employees in each of the
markets in which we operate. Certain proposed changes in federal labor laws and the National Labor Relations
Board’s pending modification of its election procedures could increase the likelihood of employee unionization
attempts. To the extent a significant portion of our employee base unionizes, our costs could increase
significantly. In addition, the states in which we operate could adopt mandatory nurse-staffing ratios or could
reduce mandatory nurse-staffing ratios already in place. State-mandated nurse-staffing ratios could significantly
affect labor costs, and have an adverse impact on revenues if we are required to limit patient admissions in order
to meet the required ratios.
Professional Liability Claims
As part of our business of owning and operating hospitals, we are subject to legal actions alleging liability on
our part. To cover claims arising out of the operations of hospitals, we maintain professional malpractice liability
insurance and general liability insurance on a claims made basis in excess of those amounts for which we are
self-insured, in amounts we believe to be sufficient for our operations. We also maintain umbrella liability
coverage for claims which, due to their nature or amount, are not covered by our other insurance policies.
However, our insurance coverage does not cover all claims against us or may not continue to be available at a
reasonable cost for us to maintain adequate levels of insurance. For a further discussion of our insurance
coverage, see our discussion of professional liability claims in “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” in Item 7 of this Form 10-K.
Environmental Matters
We are subject to various federal, state and local laws and regulations governing the use, discharge and
disposal of hazardous materials, including medical and pharmaceutical waste products. We do not currently
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