The speculative-grade rating on Franklin, Tenn.-based Community Health Systems Inc. reflects the company's highly leveraged debt leverage and ongoing industry prospects for uncertain third-party reimbursement, significant bad debt expense, and relatively weak industry patient volume trends. Community's diversified hospital portfolio, good local market positions, and management's experience operating a large hospital portfolio lessen downside business risk compared with peer companies with a more concentrated portfolio. Community historically has grown by acquiring weak, underperforming hospitals and building revenues by enhancing physician recruitment and broadening services. Since adding 50 hospitals with the acquisition of Triad in 2007, Community has benefited from the additional diversified by adding a midsize market dimension to its historical small, nonurban markets profile. While it added greater dispersion
