Businessmodel of Community Health Systems

Customer Segments

Community Health Systems operates a network of hospitals and care facilities through which it provides treatment and care to general consumers. The Company provides treatment to sufferers of a variety of ailments and diseases, including acute care, emergency room care, general and specialty surgery, critical care, internal medicine, obstetrics, and diagnostic services. The Company also operates dedicated facilities that provide psychiatric and rehabilitation services.

Community Health Systems exclusively serves patients in the US, with a network of hospitals located conveniently for local communities across 22 US states. Of these states, the Company states that its only areas of significant geographic concentration are Florida, Texas, Pennsylvania and Indiana.

Value Propositions

Community Health Systems provides value to its customers in the following ways:

• The breadth of its facilities and services, with the Company providing a broad range of services and treatments covering various ailments, diseases, and injuries;
• Its specialty accreditations, with many of the Company’s facilities having received professional accreditation for providing certain specialised services, including Advanced Primary Stroke Centre Accreditation, Cancer Centre Accreditation, Chest Pain Centre Accreditation, and Spine Surgery Certification;
• Its specialist personnel and its experienced industry executives, with the Company employing highly-qualified medical staff across its facilities, including specialist personnel, experienced healthcare industry executives; and
• Its broad network of hospitals and facilities, with the Company operating 158 hospitals across 22 US states, as well as certain specialist care centres, and outpatient services. ### Channels

Community Health Systems operates a website at www.chs.net, through which it provides information on its various locations, services, and certifications. The nature of the Company’s services does not allow for the operation of an online service channel.

Community Health Systems principally provides services through its network of hospital and care facilities. As of 31st December 2015, the Company owned or leased 194 hospitals, comprising 190 general acute care hospitals and four stand-alone rehabilitation or psychiatric hospitals. According to its website, however, the Company operates just 158 hospitals. The Company directly treats patients through its workforce of approximately 3,400 physicians and an additional 1,000 licensed healthcare practitioners.

Additionally, Community Health Systems owns and operates 79 licensed home care agencies and 22 licensed hospice agencies, located primarily in markets where it also operates a hospital. The Company also provides management and consulting services through its subsidiary Quorum Health Resources.

Customer Relationships

Community Health Systems does not provide services on a self-service basis. The Company’s treats patients directly through its network of hospitals and care facilities. Its trained physicians and medical practitioners consult directly with patients throughout the course of their care, advising them on treatment options and medical findings, and providing a high degree of personal care.

Patients are able to access the Company’s services by contacting its hospitals and facilities directly. Customers can also arrange at-home outpatient care by interacting with Community Health Systems team of healthcare professionals. Community Health Systems also provides consulting services through a specialist team, which can be contacted by customers over the phone, via post, or by email.

Community Health Systems additionally operates social media accounts with Facebook and Twitter, through which it is able to interact with customers.

Key Activities

Community Health Systems is an operator of general acute care hospitals in communities across the US, as well as specialist care facilities. It provides a broad range of healthcare services through its network of owned and leased hospitals that it operates, as well as through its affiliated businesses in non-urban and selected urban markets. Community Health Systems organises its business activities into operating segments: Hospital Operations, which comprises the Company’s operation of general acute care hospitals and related healthcare facilities that provide inpatient and outpatient healthcare services; and h

Home Care Agency Operations, which comprises the Company’s provision of in-home outpatient care. Community Health Systems provides various healthcare services, spanning general acute care, emergency room care, general and specialty surgery, critical care, internal medicine, obstetrics, diagnostic medicine, psychiatric and rehabilitation services.

Key Partners

Community Health Systems works alongside a number of businesses and organisations across its two operating segments. These partners include:

• Supplier Partners, comprising various suppliers of equipment and services, primarily medical supplies, medical equipment and pharmaceuticals for use across its medical facilities;
• Academic Partners, comprising academic institutions and research organisations, with which the Company collaborates on various projects and schemes;
• Community and Social Partners, comprising a range of non-profits and charitable organisations with which the Company collaborates on various social and community projects; and
• Medical and Healthcare Partners, comprising various physicians and not-for-profit healthcare providers, with which it jointly owns and operates certain medical and specialist care facilities. Community Health Systems has launched a number of partnership in recent years. This includes an agreement with Boston-based American Well, which assists the Company in providing round-the-clock electronic access to physician care; and a tie-up with The Cleveland Clinic that allows the Company’s to share clinical and operations expertise.

Key Resources

Community Health Systems’s key resources are its supply chain and equipment, its network of hospitals and medical facilities, its communications and It infrastructure, its partnerships, and its personnel – notably its extensive team of medical professionals and physicians.

Community Health Systems owns and leases a network of hospitals and care facilities, comprising 158 hospitals across the US. It also owns and leases office space in Tennessee, and jointly-owns a number of facilities with various partners.

Cost Structure

Community Health Systems incurs costs in relation to its procurement of equipment and supplies – including pharmaceutical products, the operation of its network of hospitals and facilities – including various medical costs, the management of its partnerships and outsourcing of certain functions, and the retention of its personnel.

In 2015 Community Health Systems accrued total operating expenses in the amount of $18.1 billion. This included personnel costs comprising the payment of salaries and benefits to its workforce of 137,000 employees, which totalled $9.00 billion for the year. Community Health Systems’s supply costs amounted to $3.05 billion, while the Company’s rental costs totalled $457 million.

Revenue Streams

Community Health systems generates revenue through its provision of various general and specialised hospital healthcare services – including critical care, specialty surgery, internal medicine, obstetrics, and rehabilitation services, as well as other outpatient services to patients in the communities in which the Company is located. The Company’s also derives revenue through its provision of consultancy and management services. The Company receives payment for healthcare services provided by its hospitals from several sources:

• The federal Medicare program;
• State Medicaid or similar programs;
• Healthcare insurance carriers, health maintenance organisations, preferred provider organisations, and other managed care programs; and
• Patients directly. In 2015 Community Health Systems generated net operating revenue for the year of $19.44 billion, an increase on the $18.64 billion recorded by the Company in 2014. A round 52.4% of the Company’s revenue was derived from managed care and other third-party payors, with 24.1% coming from the federal Medicare program.