CHS Reports Declining Volumes and Announces CEO Transition Amid Industry Challenges

Community Health Systems (CHS), a major for-profit hospital operator, has reported softer-than-expected volumes in its second-quarter earnings, leading to a revision of its 2025 guidance. The company also announced a significant leadership change, with CEO Tim Hingtgen set to step down in September.

Financial Performance and Volume Declines

CHS experienced a decrease in operational revenue during the second quarter due to lower patient volumes. Same-store adjusted admissions declined by 0.7% compared to the previous year, with the most significant percentage decline observed in surgeries. Consolidated admissions fell by 7.4%, while adjusted admissions decreased by 8.3%.

As a result of these volume challenges, CHS has lowered its 2025 guidance for pre-tax earnings. The company now expects adjusted EBITDA to range between $1.45 billion and $1.55 billion, down from its previous upper-end projection of $1.6 billion.

Kevin Hammons, CHS's CFO, attributed the flagging volumes to consumer uncertainty, particularly affecting patients with high co-pays and deductibles. The company has revised its expectations for adjusted admissions growth in 2025 to 0% to 1% year-over-year, down from the previous projection of 2% to 3%.

Leadership Transition and Industry Challenges

In a significant development, CHS announced that CEO Tim Hingtgen will be stepping down from his role on September 30, 2025. Hingtgen, who has been with the company for nearly 18 years and became CEO in 2021, cited a desire to spend more time with his family as the reason for his departure.

CFO Kevin Hammons will assume the role of chief executive, while current chief accounting officer Jason Johnson will become interim CFO. This leadership transition comes at a challenging time for CHS as it navigates industry-wide pressures and policy changes.

The company is also grappling with the potential impact of recent federal policy changes. CHS expects a cumulative $300 million to $350 million reduction in EBITDA over the next 13 years due to restrictions on Medicaid provider taxes and state-directed payments in the recently-passed "Big Beautiful Bill." Additionally, the company noted that federal immigration policies might be affecting patient volumes, particularly in states with larger immigrant populations such as Arizona, Texas, and Florida.

Despite these challenges, CHS reported progress in its efforts to deleverage its balance sheet. The company expects to benefit from recent divestitures, including $195 million from the sale of assets to Labcorp and approximately $100 million from the sale of a hospital in Tennessee.