Community Health Systems, Inc.

Good morning, everyone, and welcome to the Community Health System's first quarter 2023 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please know a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your touchstone telephones. To withdraw your questions, you may press star and two. Please also note that today's call is being recorded. At this time, I'd like to hand the floor over to Shelley Shusley, Senior Director of Investor Relations. Sam, please go ahead.

Thank you, Jamie. Good morning and welcome to Community Health Systems' first quarter 2023 conference call. Joining me on today's call are Tim Hinchin, Chief Executive Officer, Kevin Hammons, President and Chief Financial Officer, and Dr. Lynn Simon, President of Clinical Operations and Chief Medical Officer. Before we begin, I would like to remind everyone this conference call may contain certain forward-looking statements, including all statements that do not relate solely to historical or current facts. These forward-looking statements are subject to a number of known and unknown risks, which are described in headings such as risk factors in our annual report on Form 10-K and other reports filed with or furnished to the Securities and Exchange Commission. As a consequence, actual results may differ significantly from those expressed in any forward-looking statements in today's discussion. We do not intend to update any of these forward-looking statements. Yesterday afternoon, we issued a press release with our financial statements and definitions and calculations of adjusted EBITDA and adjusted EPS. We have also posted a supplemental slide presentation on our website. All calculations we will discuss on today's call exclude gain or loss from early extinguishment of debt, impairment expense as well as gains or losses on the sale of businesses, expense from government and other legal matters and related costs, expense related to employee termination benefits, and other restructuring charges. With that said, I will turn the call over to Tim Hinchen, Chief Executive Officer.

Thank you, Shelly. Good morning and welcome to our first quarter conference call. Our first quarter results include solid growth metrics and other promising indicators that demonstrate core demand for healthcare services is returning. and that we are making progress with our initiatives and investments to capture volume. Some other more challenging dynamics, such as payer mix changes and increased medical specialist fees, affected our earnings in the quarter, despite our ability to favorably manage other controllable expenses. Over the past few quarters, we have been sharing updates on our near-term priorities, which include specific tactics and resources designed to accelerate growth, strengthen the workforce, control expenses, and advance safety and quality. During my remarks today, I want to touch on these priorities and the results we are achieving, starting with our determination to accelerate growth. We experienced strong volume gains during the first quarter as consumers increasingly returned to healthcare settings now that COVID-19 has substantially subsided. Key volume metrics improved on a year-over-year basis, and they improved sequentially, continuing positive trends from the fourth quarter. Same-store admissions increased by 4.8% and adjusted admissions increased 9.4% year-over-year. Same-store surgeries showed particular strength, increasing 10.6% with broad-based gains in orthopedics, cardiovascular, GI, urology, and gynecology. Growth in these specialties, along with the continued positive impact of our transfer center service, resulted in medical and surgical case mix index improvements sequentially and growth in non-COVID acuity year over year. Capital investments designed to further develop our strongest markets are positively impacting growth in both inpatient and outpatient services. Recent examples include the full opening of a 112 bed expansion in our Naples, Florida health system, as well as the opening of a new ambulatory surgery center and a freestanding ER in our Birmingham, Alabama market. Major bed expansions and facility improvements are underway in other markets, such as Foley, Alabama, Warsaw, Indiana, which is part of our Lutheran Health Network, and Knoxville, Tennessee. A number of other investments that are designed to fuel growth continue across the portfolio. Provider recruitment remains key to growth and further expansion of service lines in our market. To that end, we continue to post favorable gains on the heels of a very strong 2022 recruitment year. Strengthening our workforce is a constant priority and we are pleased with continued progress in this area. After its first full year of operation, our centralized nurse recruitment function continues to perform extremely well with strong mid-single-digit gains in the hiring of nurses in the first quarter compared to the fourth quarter of last year. Due to the success of our centralized recruitment resources, we are in the process of expanding the scope to include sourcing and hiring of all clinical positions, not just nursing. Our partnership with Jersey College School of Nursing will expand again when our eighth program opens in our Tenova East Tennessee market later this month. Eventually through this initiative, we expect to graduate 1000 new nurses every year. And we remain focused on a variety of programs designed to strengthen retention rates as well. We ended the first quarter with an improvement of approximately 500 basis points and nursing turnover rates on top of the significant gains in 2022. Advancing safety and quality remains one of our most important priorities. Last quarter, we highlighted our work over the past decade to reduce serious safety events, noting an impressive 87.9% reduction in our serious safety event rate since the baseline established in 2013. That improvement is now 89%, a testament to the commitment of our medical professionals, caregivers, support teams, and health system leaders. I want to take a moment to express my gratitude for what they do every day to ensure safe, quality care for their patients. And CHS recently was ranked number one among the top 30 US healthcare systems for online reputation, a distinction that is the result of positive online ratings and reviews for our healthcare providers and services, along with a high level of responsiveness to the voice of the customer. We use those insights to continuously improve and we know a strong online reputation helps cultivate new patient acquisition and loyalty. This is our second year in a row to achieve this top ranking. Through targeted investments in innovative technologies to improve outcomes, we continue to see positive results in clinical quality and customer experience. These programs include virtual sitters for patients at high risk for falls, maternal-fetal monitoring technology that enables earlier interventions when needed in labor and delivery, and the current rollout of at-home remote patient monitoring for individuals with chronic health conditions. We are also in discussions with other potential innovation partners that offer clinical technologies to further advance patient care and that have the potential to generate returns for our company in the years ahead. In summary, despite the persistent pressures on near-term margins, Our team continues to prioritize and position the organization for growth, successfully deliver upon key initiatives to improve operations, and advance the long-term competitive position of our health systems. As a result, we expect to make incremental progress both throughout the year and for the longer term. Kevin, I'll now turn the call over to you.