Community Health Systems, Inc.

Good day and welcome to the Community Health System's first quarter 2024 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialists 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 then one on your touchtone phone. And to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Anton High, Vice President of Investor Relations. Please go ahead, sir.

Thank you, Chuck. Good morning, everyone, and welcome to Community Health Systems' first quarter 2024 conference call. Joining me on today's call are Tim Henschen, Chief Executive Officer, Kevin Hammons, President and Chief Financial Officer, and Dr. Lynn Simon, President of Healthcare Innovation and Chief Medical Officer. Before we begin, I must remind everyone that 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 SEC. 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've also posted a supplemental slide presentation on our website. All calculations we will discuss exclude impairment expense as well as gains or losses on the sale of businesses, expense from government and other legal matters and related costs, expense from business transformation costs, and expenses related to employee termination benefits and other restructuring charges.

With that said, I'll turn the call over to Tim Henschen, Chief Executive Officer. Thanks, Anton. Good morning and thank you for joining our first quarter conference call. At CHS, 2024 is off to a good start with the solid operating and financial results achieved in the first quarter. Same store net revenue increased 5.7% compared to the first quarter of 2023. Same store admissions increased 3.8% and adjusted admissions were up 1.9%. The prior year comp was our most challenging of the year with strong same store admissions growth of 4.8% and adjusted admissions of 9.4%. So we were very pleased to see continued strong demand. Same store ED visits increased 3.4% in the quarter and surgery slightly increased In the first quarters of both 2023 and 2024, surgical volume was well above the first quarter of 2019, beating our pre-COVID baseline by approximately 10%. Growth, coupled with strong expense management, led to 120 basis points of margin expansion year over year. Adjusted EBITDA came in at $378 million, up 12.8% from the prior period on a consolidated basis. with growth in our core portfolio outpacing the impact of prior period divestitures. This first quarter performance puts us very much in line with the guidance provided in February, but our work is not yet done, and our leaders remain focused on the opportunities ahead of us. We continue to make steady progress in each of our near-term priorities, and we are especially pleased with investments that are accelerating growth. We opened our new tower in Knoxville, Tennessee a few weeks ago and our Baldwin County, Alabama campus expansion remains on schedule to open by the end of the year to address the strong demand for healthcare services in that fast-growing market. Investments continue into incremental access points to expand outpatient capacity in multiple markets, which included the opening of two new ASCs during the quarter in our Tucson, Arizona and Cedar Park, Texas markets. Another high impact initiative that we've been updating you on is our work to insource the management of certain hospital-based medical specialties. In a minute, Kevin will share details about how the financial impact from this initiative is tracking to our expectations, but I want to address the clinical and operational improvements we are seeing. We now manage 29 ED and hospitalist programs. and across the board, we are realizing better quality metrics, improved throughput, lower premium pay utilization, and greater patient satisfaction. These improvements are consistent with our enterprise goals, and it is gratifying to see so much progress, especially when you consider that we have been self-operating these programs for less than a year. We've expanded our efforts to insource select anesthesia programs with two sites already in place, and additional opportunities expected to come online in the months ahead. We don't often take the opportunity to share our internal programs that are driving alignment across the organization, but today I want to mention that we recently hosted our 2024 Health Systems CEO and Medical Staff Leadership Conferences. We spent time reviewing our goals and the initiatives that will drive results over the next few years. It was energizing to see so much commitment from our local health system leaders who are absolutely focused on executing our strategies and leveraging the resources and support available across the CHS organization. I remain excited about the opportunities ahead this year and into the future. During the conferences, we also discussed our enthusiasm to be on the leading edge of innovation, leveraging our size and scale to discover new opportunities and to improve care design, delivery, and outcomes, utilizing technology, and joint venture partners that are focused on moving healthcare forward. Last quarter, Dr. Miguel Benet talked about our partnership with Google Cloud and worked to unify our data into a single platform that can enable the future use of AI in healthcare settings. This quarter, I've asked Dr. Lynn Simon, President of Healthcare Innovation and our CMO, to share more about innovation across DHS, and in particular, our new partnership with Mark Cuban Cost Plus Drug Company. Lynn?