The following is excerpted from the question-and-answer section of the transcript.

Question: Gary Lieberman - Wells Fargo - Analyst: Thanks. Good morning. Was hoping maybe you could talk a little bit more about what you saw on the elective procedure front, and where you think discretionary utilization is and where it might go, given the economy.

Answer By: Wayne Smith - Community Health Systems, Inc. - Chairman, Pres, CEO

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Gary Lieberman - Wells Fargo - Analyst: Okay, and then just one follow-up question. On the expense front, how much room if any do you think there still is on either contract labor or other expense items to squeeze out of the business?

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Gary Lieberman - Wells Fargo - Analyst: Okay, great. Thanks a lot.

Question: Albert Rice - Soleil - Pomeroy Research LLC - Analyst: Hello everybody. I had a couple quick things. You guys obviously have added to your beds. It's interesting to see by licensed beds, by bringing some things that were in discontinued back, as well as buying out some minority or some partners and consolidating. As you guys get to the point where your free cash flow has sort of bought in whatyoucanbuywiththepublicdebtandyou'releftwithjustpayingdownbankdebt,doesthatperkyourinterest up in getting back in the acquisition market? What are you seeing out there, is there any resurgence in activity and will we see you do more in that front, first off?

Answer By: Wayne Smith - Community Health Systems, Inc. - Chairman, Pres, CEO

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Answer By: Wayne Smith - Community Health Systems, Inc. - Chairman, Pres, CEO

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Albert Rice - Soleil - Pomeroy Research LLC - Analyst: How much flexibility do you have on buying shares, Larry?

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Albert Rice - Soleil - Pomeroy Research LLC - Analyst: Okay.

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Albert Rice - Soleil - Pomeroy Research LLC - Analyst: Okay.Justwantedtoaskyouoneotherthing.Onthephysicianrecruitment,youhadabanneryearlastyear.Sounds like things are going very well, on the recruitment front again this year, even better. There's a lot of dynamics going on with what's happening in the economy and all, but you how do you expect, if you bring in a lot of physicians last year's back half, this year's first half, when that might start to impact your consolidated admissions numbers?

Answer By: Wayne Smith - Community Health Systems, Inc. - Chairman, Pres, CEO

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Albert Rice - Soleil - Pomeroy Research LLC - Analyst: Did you give the numbers for how many you've recruited so far this year? I may have missed it.

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Albert Rice - Soleil - Pomeroy Research LLC - Analyst: 704. Okay. Thanks a lot.

Question: Kevin Fischbeck - Banc of America Securities-Merrill Lynch - Analyst: Okay thank you. Good morning. This quarter pretty much played out the way that everyone else's quarter played out, in that you beat the quarter nicely, but you don't seem to be assuming much of a flow-through into the second half of the year. Can you talk a little bit about the outlook for the second half?

Answer By: Wayne Smith - Community Health Systems, Inc. - Chairman, Pres, CEO

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Kevin Fischbeck - Banc of America Securities-Merrill Lynch - Analyst: Okay, that's very helpful. I guess Wayne, maybe to follow up on your comments, I want to get your thoughts about 2010 just from a broad perspective. You guys have done a great job managing costs, and in particular labor costs, and wanted to get your thoughts about the extent that the challenging environment you guys talked about as far as volume pressure and bad debt expense, to the extent that that continues next year, the economy does not get better, - -

Answer By: Wayne Smith - Community Health Systems, Inc. - Chairman, Pres, CEO

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Kevin Fischbeck - Banc of America Securities-Merrill Lynch - Analyst: I guess that's makes sense. There's a lot of uncertainty out there. Is the thought that the economy's weak, that there still is maybe another leg to go down as far as controlling the cost as well, so we shouldn't just assume weak volumes and bad debt, but we should also assume that means that we're going to have leverage again next year to help control cost growth?

Answer By: Wayne Smith - Community Health Systems, Inc. - Chairman, Pres, CEO

Question: Kevin Fischbeck - Banc of America Securities-Merrill Lynch - Analyst: Very helpful thanks.

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Shelley Gnall - Goldman Sachs - Analyst: Hi, thanks. I guess my first question is your bad debts looked pretty good in the quarter, but it looks like you have increased your allowance for doubtful accounts as a percent of self pay. Can you talk, it sounds like it's moved up from 80% to 81%. Can you talk a little bit about what you're seeing for collections?

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Shelley Gnall - Goldman Sachs - Analyst: So just to confirm, sounds like your collections of your copays from managed care accounts, the copays and deductibles piece, that hasn't really deteriorated?

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Shelley Gnall - Goldman Sachs - Analyst: Okay. Thanks. And then a question about how you've controlled your salaries expense the old fashioned way. I'd love to know a little bit more about what that means. So, it sounds like you didn't do a lot of headcount reduction. Sounds like you did offer some wage increases. Didn't really cut back on benefits, so is this a question of managing productivity and efficiency? Is it a question of leveraging your existing staff over a stronger revenue base?

Answer By: Wayne Smith - Community Health Systems, Inc. - Chairman, Pres, CEO

Question: Shelley Gnall - Goldman Sachs - Analyst: Tell me a little bit more about how you did it.

Answer By: Wayne Smith - Community Health Systems, Inc. - Chairman, Pres, CEO

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Shelley Gnall - Goldman Sachs - Analyst: Okay. Great. Thanks. And then I guess I just have one clarifying question. On the guidance update, it sounds like there was a dilutive impact from moving the two hospitals into continuing ops and it sounds like it was a dilutive impact, revising expectations for IPPS. Can you quantify the total impact from those two items for us on the EPS guidance?

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Answer By: Wayne Smith - Community Health Systems, Inc. - Chairman, Pres, CEO

Question: Shelley Gnall - Goldman Sachs - Analyst: Yes. Thanks.

Question: Darren Lehrich - Deutsche Bank - Analyst: Thanks. Good afternoon, everyone. I want to just ask a couple of things here. The first was related to the new accounting rules around the acquisition spending, and we've seen that number move up. We clearly have gotten your commentary around your desire to do deals, given the limitations you have with buying back more of your publicly traded debt. What's a good way to think about what the normalized spending levels would be, the spending that you previously capitalized, obviously not in a year where you do a Triad kind of deal, but just over time, how should we think about that as an impact to your earnings on a go-forward basis?

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Darren Lehrich - Deutsche Bank - Analyst: Okay. That's helpful.

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Darren Lehrich - Deutsche Bank - Analyst: You did call out materials management as one of the areas you're seeing some improvement relative to the $100 million number. I'm wondering if you can just maybe flush out a little bit what you're doing on that front, if there's any particular successes with regard to supplies or implants that you'd maybe share with us. I think you've been doing a number of things with Orthopedics, but can you just talk a little bit more about that?

Answer By: Wayne Smith - Community Health Systems, Inc. - Chairman, Pres, CEO

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Answer By: Wayne Smith - Community Health Systems, Inc. - Chairman, Pres, CEO

Question: Darren Lehrich - Deutsche Bank - Analyst: Okay. Fair enough. And then just on the cash flow from operations, you're trending at least year-to-date, pretty well relative to the guidance. I know you brought it up at the low end. I'm just wanting to get some comments from you, Larry, as to how we should think about the back half of the year. It seems like you would be able to push through the guidance, given your run rate, so are there any seasonal items or working capital items that we ought to be thinking about in the back half, just besides normal seasonal earnings patterns?

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Darren Lehrich - Deutsche Bank - Analyst: Very good. My last thing here, just for Wayne, on physician recruiting, can we just get any updated comments you have about employment models and whether you're doing anything differently at all on that front? Are you employing more doctors this year versus last year?

Answer By: Wayne Smith - Community Health Systems, Inc. - Chairman, Pres, CEO

Question: Darren Lehrich - Deutsche Bank - Analyst: All right. Thanks a lot.

Question: Ralph Giacobbe - Credit Suisse - Analyst: Thanks.Goodafternoon.Justfirstonthepricingside,alittlebitstrongerthanyourpeers.Canyougobacktomaybe talking about what's driving that stat? You talked a little bit about mix. Just wondering maybe about peer pricing and then the sustainability of that trend?

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Ralph Giacobbe - Credit Suisse - Analyst: Okay. And then can you remind us on your uninsured and discount policy, it just appears some of your peers seem to be witnessing a little bit of a spike there, which is depressing their sort of pricing stat, if you will, and showing maybe a little bit better on the bad debt line. So just wondering if you could just remind us of the uninsured and charity discount policy?

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Ralph Giacobbe - Credit Suisse - Analyst: Okay. I don't know if you mentioned this, any swine flu impact in the quarter?

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Ralph Giacobbe - Credit Suisse - Analyst: Okay, and then I think in the past you've given us margin profile, I think by how long you've operated the facility. Haven't seen that in a little while. Do you still have those stats, by class, remember you used to do class of 2006, et cetera.

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Ralph Giacobbe - Credit Suisse - Analyst: Right. Classes before that, I'm assuming they're sort of up to corporate average, or is there still ability to bring that up?

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Ralph Giacobbe - Credit Suisse - Analyst: Okay. All right. And then just the last thing, was wondering, I don't know if you've given this to us in the past, but sort of the bad debt guidance, do you guys think about it in terms of what the average unemployment rate would be in your markets around that? I know you said there's not a direct correlation with that, but just in terms of high level, did you guys think of sort of that range incorporates bad debt of "X" percent?

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Ralph Giacobbe - Credit Suisse - Analyst: Okay. Great. Thank you very much.

Question: Adam Feinstein - Barclays Capital - Analyst: Alright, thank you. Good morning everyone. Let me start by saying Wayne I enjoyed seeing you on TV with Vice President Biden during the press conference for the hospital deal. So maybe that's a great place to start. Maybe just - -

Answer By: Wayne Smith - Community Health Systems, Inc. - Chairman, Pres, CEO

Question: Adam Feinstein - Barclays Capital - Analyst: But just certainly was curious just to get your thoughts in terms of the deal that was signed, and I know you were actively involved. So whatever you're able to say, just curious to get just some high level thoughts there.

Answer By: Wayne Smith - Community Health Systems, Inc. - Chairman, Pres, CEO

Question: Adam Feinstein - Barclays Capital - Analyst: Absolutely. Okay. And just a couple follow-up questions. I guess maybe just talk about the commercial mix of business, clearly a trend seen in the last year is with less people have commercial insurance, is seeing that mix. I know you guys have actually held up pretty well relative to others. Just wanted to see if that was still the case.

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Adam Feinstein - Barclays Capital - Analyst: And then just in your slide deck you talked about that you've already gotten $58 million out of the $100 million of the cost savings that you anticipated for this year. Maybe just talk a little bit about what's still left there, and just as we think about think about the opportunity.

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: Adam Feinstein - Barclays Capital - Analyst: Okay, and I guess just a final question here. I know you spoke a little bit before about the recruiting and just the success you've had there, and certainly you kind of joked that if healthcare reform happens, more doctors will want to come and be employed, but we are hearing more and more about that, and that seems to be one of the key issues these days in terms of employing doctors. Maybe just talk about your strategy in terms of just engaging doctors, and I don't know if you have a number in terms of the number of employed doctors now relative to a year ago, but just curious in terms of how you guys are thinking about that.

Answer By: Wayne Smith - Community Health Systems, Inc. - Chairman, Pres, CEO

Question: Adam Feinstein - Barclays Capital - Analyst: All right. Thank you.

Question: David Bachman - Longbow Research - Analyst: Hey, good afternoon. Thanks for fitting my question in here. Just a couple quick things here. I want to go back to the case mix index. Nice improvements there this quarter and year-to-date. Can you just talk about the breakdown of some of the things that are driving that, whether it's physician recruitment, driving higher surgeries, or anything on the documentation, coding front, that you guys are doing to drive that up.

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: David Bachman - Longbow Research - Analyst: Are you seeing that consistent across the hospitals, or in the Triad hospitals, is that opportunity any different than - - ?

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Answer By: Wayne Smith - Community Health Systems, Inc. - Chairman, Pres, CEO

Question: David Bachman - Longbow Research - Analyst: Great. Thanks. And just in terms of self pay volumes or collection rates in the quarter, do you see anything at the end of the quarter different on that front than at the beginning of the quarter or I guess in 2Q?

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: David Bachman - Longbow Research - Analyst: Okay, and then just one last question, just on ER volume, just consolidated in the same store, some peers have reported real strong ER growth in the quarter. Just wondered, maybe you touched on that, but what you guys are seeing?

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Answer By: Wayne Smith - Community Health Systems, Inc. - Chairman, Pres, CEO

Answer By: Larry Cash - Community Health Systems, Inc. - EVP, CFO

Question: David Bachman - Longbow Research - Analyst: Bringing that admit rate up. Okay, great. Alright, thanks.

Answer By: Wayne Smith - Community Health Systems, Inc. - Chairman, Pres, CEO