The speculative-grade rating on Franklin, Tenn.-based Community Health Systems Inc. reflects the company's highly leveraged financial risk profile and ongoing industry prospects for uncertain third-party reimbursement, significant bad debt expense, and relatively weak 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's hospitals are the only provider of inpatient acute care in about two-thirds of its mostly rural markets. This sole-provider status contributes to a solid local market position and adds an element of predictability regarding demand for Community's services. However, in Standard&Poor's Ratings Services' view of the company's fair business risk profile, this
