Community Health Systems 2014 Annual Report Download - page 6

Letter to Stockholders
Our acquisition of Health Management Associates, Inc. (HMA)
in January added 71 hospitals to our portfolio and has made
us one of the largest hospital operators in the nation. Other
2014 acquisitions were just as strategic as we welcomed hos-
pitals that complement existing markets in Pennsylvania,
Florida, Mississippi, and South Carolina. We ended the year
207 hospitals strong. From Alaska to Florida, from New Jersey
to California, our hospitals are keeping healthcare close to
home for millions of people.
The ability to acquire and rapidly assimilate hospitals has
fueled exponential growth through the years. Like the suc-
cessful acquisition of Triad Hospitals in 2007, absorbing HMA
accelerated company strategies, most notably our work to
develop regional healthcare networks. We are honored to
work with the outstanding physicians and caring employees in
these hospitals and appreciate their active participation in our
resolute commitment to deliver quality, compassionate, cost-ef-
fective care as we form a stronger, combined organization.
To ensure success, we’ve deployed vast resources to improve
clinical services and operational and financial performance.
We’ve exceeded our first year synergy target, with $125 million
in synergies achieved and we are well on our way to total
projected synergies of $250 to $275 million. We also financed
this transaction on very favorable terms with more than
$7 billion raised.
In 2014, healthcare reform became a reality as millions of
Americans gained medical coverage through Health Insurance
Exchanges and expansion of state Medicaid programs.
Implementation of major components of the Affordable Care
Act (ACA) brought sweeping changes to the U.S. healthcare
system, upheaval and opportunity in the course of what is
likely the most significant transformation of our industry since
ratification of Medicare and Medicaid in the summer of 1965—
fifty years ago.
Despite contentious debate and uncertainty about the ACA,
this much is undeniably true—millions of people who could
not previously afford medical coverage or health services now
have insurance and the resulting peace of mind. In many
cases, they are receiving preventative medical care.
They could see their physicians before a health condition
deteriorates into medical crisis.
Unfortunately, millions of other Americans who live in states
that have not expanded Medicaid are painfully left out. It
is time for the governors and legislatures in these states to
do the right thing, finding ways to cooperatively expand
their Medicaid programs so that all will have access to the
care they need.
More than seven million people were insured under the Affordable
Care Act in 2014. This translates positively for hospitals that have
long shouldered the burden of uncompensated care. In CHS
affiliated hospitals, uninsured hospital adjusted admissions
declined 57 percent in Medicaid expansion states in 2014 and
adjusted admissions of Medicaid patients increased approxi-
mately 30 percent.
As I consider the significant accomplishments of our past
year, I am most proud of the quality care we provide for
patients, and this is measurable in a number of ways. The
Joint Commission named 107 of our hospitals Top Performers
on Key Quality MeasuresTM in 2014. Of the 147 hospitals nation-
wide that have earned this distinction for all four years that
the recognition has been awarded, 33 are CHS affiliated
hospitals.
Our relentless focus on reducing the inherent risks of health-
care delivery is yielding safer patient experiences. Our legacy
hospitals have reduced Serious Safety Events by 45 percent
since April 2013. As newly acquired facilities fully incorporate
our established protocols to deliver highly reliable, safe care,
we anticipate that they will achieve similarly impressive
results. We are also successfully reducing hospital-acquired
conditions. Eighty-six percent of our affiliated hospitals
avoided financial penalties under the CMS Hospital-Acquired
Condition program in 2014, which was the best overall perfor-
mance of all of the publicly-traded hospital companies.
Our hospitals are focusing on high demand services, including
orthopedics, cardiovascular care and women’s healthcare.
Emergency Departments remain a key access point so we
persistently work to reduce wait times and to move non-
emergency cases to faster, less expensive care settings. We
have established five new regional transfer centers to ensure
that patients who need higher levels of care can be quickly
routed to appropriate facilities within our system.
2 // COMMUNITY HEALTH SYSTEMS, INC.
The year 2014 will be recorded as a historical milestone in the life of Community Health
Systems—a turning point that positively altered the company’s trajectory and resulted in
a year of significant growth and positive momentum.