Community Health System Faces Lower Volumes, CEO Steps Down
Community Health System’s second-quarter revenue dipped due to unexpected volume declines, prompting a CEO transition and a revised financial outlook.
- Community Health System (CHS) reported a drop in operational revenue for the second quarter, citing lower patient volumes.
- The Tennessee-based operator lowered its 2025 guidance for pre-tax earnings.
- CEO Tim Hingtgen is retiring, with CFO Kevin Hammons set to take over as chief executive on Sept. 30.
- Executives pointed to consumer uncertainty and potential impacts from immigration enforcement as reasons for the volume dip.
NASHVILLE, Tenn., July 25, 2025 – Community Health System (CHS) saw its operational revenue fall during the second quarter, a downturn attributed to softer-than-expected patient volumes. This decline has led the for-profit operator to revise its 2025 guidance for pre-tax earnings. Adding to the news, CEO Tim Hingtgen announced his retirement, with CFO Kevin Hammons slated to assume the chief executive role on Sept. 30. Jason Johnson, current chief accounting officer, will step in as interim CFO.
CHS executives explained the flagging volumes by referencing consumer uncertainty, which they believe is impacting spending habits. “It’s those patients who have the highest co-pays and deductibles that are being most impacted,” Hammons stated during a call with investors.
In the second quarter, CHS experienced a 0.7% decrease in same-store adjusted admissions compared to the previous year, with surgeries seeing the most significant percentage drop. Consolidated admissions fell by 7.4%, and adjusted admissions were down 8.3%.
Hammons also suggested that federal immigration enforcement might be affecting patient volumes, particularly in states with larger immigrant populations such as Arizona, Texas, and Florida. He noted that individuals in immigrant communities may be avoiding public spaces, including hospitals, due to fear, even if they have legal status. “I know the hospitals are no longer considered a sanctuary location, and there is concern even among immigrants with legal status that there’s some fear in that community,” Hammons said.
Consequently, CHS now anticipates adjusted admissions to grow between 0% and 1% year over year in 2025, a downward revision from the previously projected 2% to 3% growth. The impact of lower volumes was reflected in the company’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), which stood at $380 million in the quarter, down from $387 million in the prior year period. Net operating revenues also experienced a slight decline.
The reduced volume growth also led CHS to tighten its adjusted EBITDA guidance for 2025, now projecting between $1.45 billion and $1.55 billion, a decrease from the previous high-end expectation of $1.6 billion.
Furthermore, CHS anticipates a cumulative EBITDA reduction of $300 million to $350 million over the next 13 years due to changes in Medicaid provider taxes and state-directed payments stemming from recent legislation. Hammons indicated these changes would have minimal impact in 2025 and 2026, with effects gradually increasing from 2027 onward. The company’s forecast does not yet account for potential impacts from Medicaid work requirements or changes to the Affordable Care Act exchanges, such as the expiration of enhanced subsidies.
On a positive note, CHS is making progress in deleveraging its balance sheet, a key long-term objective. Proceeds 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, are expected to bolster this effort. The company has several other divestitures in progress.
Hingtgen, who has been with CHS for nearly 18 years, including his tenure as CEO since 2021, cited a desire to spend more time with his family as the reason for his retirement. “This is not a decision that was made easily or quickly or without regard to what’s best for CHS,” Hingtgen shared during the investor call. “I wrestled with whether to retire and when to retire in part out of a sense of loyalty to the organization, but even more than that, out of my sincere desire to continue to be a part of the progress happening in this company and the opportunities and achievements I still see ahead.”
Analysts at Jefferies noted that the CEO transition could introduce uncertainty for CHS as it navigates federal policy changes and its deleveraging strategy. While acknowledging the company’s experienced executive team, Jefferies suggested that Hingtgen’s departure might warrant a stock valuation adjustment until the new management’s track record is established.
