The speculative-grade rating on Franklin, Tenn.-based Community Health Systems Inc. reflects the company's highly leveraged financial risk profile tied to acquisition activity and ongoing industry prospects for uncertain third-party reimbursement, significant bad debt expense, and relatively weak patient volume. Community's diversified hospital portfolio and well-established positions in many of its local markets contribute to its fair business risk profile compared with the lower business risk profiles of several rated peer companies. Community's hospitals are the only provider of inpatient acute care in about two-thirds of its mostly rural markets. This sole-provider status adds an element of predictability regarding demand for its services. However, this is tempered by the risks to pricing as third-party payors seek to limit the rising cost
