Community Health Systems, Inc. (NYSE:CYH) Q1 2024 Earnings Call Transcript

Josh Raskin: Got it. That’s helpful. And then just on supply expense, down about 80 basis points year-over-year despite sort of the shift in patient, continued increase in the acuity and things like that. So, what’s driving the supply expense improvements?

Kevin Hammons: I think there is a number of things driving some supply expense improvement. It’s relatively flat on a per adjusted admission basis, which would indicate that we are stepping over inflation and managing that well. We are doing that with a number of supply chain initiatives that we have in place to ensure we are getting best pricing, taking advantage of scale and so forth. We are putting in our ERP, which we have talked about project and power. I can’t say that we are realizing a lot of savings currently yet because we only have a handful of hospitals up and running at least through the first quarter, and it’s still relatively new, but it’s positioning us with significant – significantly improved information that will allow us to manage that expense going forward.

Back to the quarter, payer mix, I think had – or I am sorry, surgical mix, had probably a significant impact on our ability to manage that supply expense with fewer high dollar implant items during the quarter. And then with the growth in net revenue, the top line growth, I think had some dilutive impact on that calculation as a percent of net revenue, bringing in your Medicare – Medicaid supplemental program revenue as well as the inpatient and growth in kind of medical cases, which can have a lower supply cost as a percent of net revenue.

Josh Raskin: Okay. Perfect. Thanks.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Tim Hingtgen for any closing remarks. Please go ahead.

Tim Hingtgen: Great. Thank you, Chuck and thanks to all of you for joining our call today. We remain committed to achieving our goals for 2024 and look forward to updating you again at the midyear point. As always, if you have additional questions, you can reach us at 615-465-7000. Thanks again and have a great day.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.