Community Health Systems (CYH) investor relations material

Volume and financial performance trends

• Softer than expected volume growth, especially in commercial outpatient elective procedures, attributed to economic uncertainty and high patient cost-sharing.

• Inpatient volumes remained strong, driven by necessary care, while commercial volumes were weaker; Medicare Advantage showed strength, Medicaid was slightly soft.

• Guidance for the year was revised to reflect continued volume softness, with adjusted admissions expected to be flat to slightly negative in the back half.

• Financial headwinds included a $70M miss in Q2, additional $70M headwind expected in H2, and $25M impact from divestitures, partially offset by $140M in Medicaid supplemental payments.

• Key levers for improvement include modest volume and payer mix improvements, and Medicare rate increases in Q4.

Cost management and operational initiatives

• Labor costs are stable and within guidance, with contract labor normalized post-COVID.

• Medical specialist fees remain a challenge, especially in anesthesiology and radiology, but mitigation includes in-sourcing and technology adoption.

• In-sourcing efforts have improved patient and physician experience, and quality, particularly in ED and hospitalist services.

• Ongoing cost-saving initiatives are supported by a new ERP system, expected to yield further efficiencies and supply chain insights over the next two years.

Policy, regulatory, and payer environment

• Exchange business is less than 5% of net revenue, with limited exposure to potential subsidy expirations; some momentum exists for extension of tax credits.

• Medicaid supplemental payments provide a significant tailwind, with additional state-level opportunities pending approval.

• Denials remain elevated, especially in Medicare Advantage, but have stabilized; technology and AI are being used to manage denials and improve collections.

• Commercial rate increases remain strong at 4–6%, with 75% of 2026 contracts already negotiated at favorable rates.