TheStreet.com  Jul 16  Comment 
NEW YORK (TheStreet) -- Community Health Services was gaining 8.5% to $46.21 Wednesday after HCA Holdings  reported positive second quarter results. For the second quarter HCA Holding reported earnings of $1.07 a share, beating analysts'...
Market Intelligence Center  Jun 25  Comment 
Community Health Systems Inc (CYH) traded between $44.83 and $46.09 before closing at $44.86 Tuesday and presents some attractive trading opportunities today. MarketIntelligenceCenter.com’s algorithms have picked a Sep. '14 $44.00 covered call...
Benzinga  Jun 17  Comment 
Improving profits at hospital companies is one likely outcome of the Affordable Care Act, according to an analyst who boosted price targets of a raft of stocks in the sector Tuesday. The biggest ramp-up is expected during the second quarter....
Market Intelligence Center  Jun 6  Comment 
For a hedged play on Community Health Systems Inc (CYH) MarketIntelligenceCenter.com’s patented trade-picking algorithms selected a Sep. '14 $44.00 covered call for a net debit in the $41.47 area. That is also the break-even stock price for the...
Market Intelligence Center  Jun 5  Comment 
After closing Wednesday at $42.13, Community Health Systems Inc (CYH) presents an attractive opportunity to get a 6.92% return in just 107 days, which is an annualized return of 23.62% (for comparison purposes only). To enter this trade, sell one...
TheStreet.com  May 20  Comment 
Update (9:37 a.m.): Updated with Tuesday market open information. NEW YORK (TheStreet) -- Bank of America/Merrill Lynch added Community Health Systems  to its US 1 List. The firm noted the company is most leveraged to healthcare reform. It...
SeekingAlpha  May 7  Comment 
Community Health Systems (CYH) Q1 2014 Earnings Call May 07, 2014 11:00 am ET Executives Michael J. Culotta - Wayne T. Smith - Chairman and Chief Executive Officer W. Larry Cash - Chief Financial Officer, President of Financial...
Market Intelligence Center  May 1  Comment 
Community Health Systems Inc (CYH) presents a trading opportunity that offers a 4.11% return in just 51 days. A covered call on Community Health at the $37.00 level expiring on Jun. '14 offers an assigned return rate of 4.11% or 29.40%...
Market Intelligence Center  Apr 29  Comment 
The patented algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center found a trading opportunity with Community Health Systems Inc (CYH) that should provide a 4.47% return in just 53 days. Sell one Jun. '14 call at the...
Benzinga  Apr 17  Comment 
Community Health Systems (NYSE: CYH) shares touched a new 52-week low of $34.655. Community Health shares have dropped 14.42% over the past 52 weeks, while the S&P 500 index has gained 20.80% in the same period. RadioShack (NYSE: RSH) shares...


Community Health Systems (NYSE:CYH) owns and leases over a hundred hospitals in 29 states, primarily in rural communities.[1] While the company's growth is partially organic, the bulk of revenue increases have resulted from acquisitions, such as the purchase of Triad Hospitals Inc. which doubled the size of the CYH network, in terms of beds, and made it the largest publicly traded hospital operator chain in the country. The company earned $12 billion in revenue and $243 million in net income in 2009.[2]

As U.S. demographics change - and trend toward urban or rural relocations - so do CYH's revenues. Population size and economic cycles help determine the number of potential patients living close to CYH's hospitals and the amount of healthcare they need. Medicare and Medicaid laws also impact the company's operating income, and the growing quantitative gap between insured and uninsured and/or underinsured patients are concerns as more private clinics and physician-owned hospitals attract the most expensive and specialized medical procedures funded by private insurance. To stave off competition from these smaller, more nimble providers, the firm often forms partnerships with them.

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Community Health holds a virtual monopoly in most of its markets simply because its hospitals are the only providers of emergency care services in the vicinity. This is common to most American rural hospitals and reflects years of industry consolidation. Thus, the firm's primary competition is not other area hospitals, but rather urban hospitals, which patients often choose for specialized care. The firm competes by recruiting more specialists and investing in new technology in order to widen the range of services available to patients.

Compared to its urban counterparts, Community Health's hospitals have several operational advantages that help them achieve higher margins. A rural location gives hospitals the benefit of less competition, since many are monopolies in their communities. In addition to making more flexibility in pricing possible, this type of market power can bolster a hospital's reputation, encouraging positive relationships with patients and local physicians. Furthermore, patients treated at rural hospitals often have less complex health problems, as those with more advanced illnesses tend to travel to urban hospitals to receive care. This results in a lower cost structure, as more common medical issues can be treated with fewer expenses. Finally, Community Health maximizes the revenues it receives from private insurance providers by avoiding contractual relations with them and shunning and risk sharing agreements. Instead, they negotiate payments with these institutions on a case by case basis. Because private insurers have a smaller presence in rural areas, they are essentially not interested in penetration of rural clients and thus offer fewer discounts and special promotions to them, which results in higher reimbursement for hospitals. At the same time, CYH cannot offer the same level of equipment and specialized care as urban hospitals, leading it to lose potential patients. It also lacks teaching and research facilities, which are common to urban hospitals.

In the past several years, new types of competitors have been entering Community Health's markets and decreasing patient volume: physician-owned hospitals and stand alone surgery and diagnostic centers. New technologies have made it possible for physicians to perform procedures that earlier had to be done in a hospital. Community Health is addressing this challenge by attempting to partner with physicians and other independent facilities.


  1. CYH 2009 10-K "Overview of Our Company"
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