CHS investor calls for ouster of CEO Wayne Smith

Beckers Hospital Review ^ | August 21, 2017 | Ayla Ellison

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An investor in Franklin, Tenn.-based Community Health Systems released a letter Monday it sent to CHS' board calling for the replacement of the company's board chairman and CEO Wayne Smith.

In the letter dated Aug. 8, ASL Strategic Value says several missteps in recent years have led to the downfall of CHS, including the company's 2014 acquisition of Health Management Associates in Naples, Fla.

"It is time for the board to exercise its fiduciary duty to the shareholders and replace the current CEO," states the letter from ASL.

ASL also calls for the board to take back part of CHS' senior executives' compensation. CHS has lost approximately 50 percent of its capital over the past 17 years. During this time, Mr. Smith received compensation of more than $350 million, and the five most senior executives at the company received total compensation of more than $500 million, according to ASL.

ASL, which describes itself as a "long-term investor" in CHS, said it has tried to contact CHS leadership on numerous occasions to voice its concerns about the company's recent operating results. "Unfortunately, none of our phone calls were returned," wrote ASL in the letter.

CHS did not immediately respond to Becker's Hospital Review's request for comment.

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Community Health Systems has $13 billion in debt plus shrinking patient census and revenue. Throw in poor community/physician relations compounded by exorbitant prices and harsh collection practices and you get a for profit hospital company on the ropes. They bet on Obamacare opening a flood of patients that did not materialize. I guess the company will be worth more for by selling its individual hospitals rather than the whole.