Community Health Systems Continuing Its “SELL” Strategy

COMMUNITY HEALTH SYSTEMS CONTINUING ITS “SELL” STRATEGY – WHETHER MIDDLE TENNESSEE’S TENNOVA HEALTHCARE-LEBANON WILL BE AFFECTED UNKNOWN

Modern Healthcare reports that publicly traded Community Health Systems is resuming its divestiture strategy in its ongoing effort to reduce more than $15B in debt. The latest hospital to be sold is an 88-bed hospital in Lake Charles, LA.

CHS reports a Q1-2017 operating loss of $199M and a 1% year-over-year decline in admissions. Many of the hospitals sold or earmarked for sale as part of CHS’s portfolio rationalization and deleveraging strategy are non-urban hospitals not meeting CHS’s financial or strategic targets, or that were acquired as part of the ill-fated HMA acquisition in early 2014.

A review of published CHS transaction activity reveals that in the most recent 12 months, CHS has sold or is in the process of selling more than 50 hospitals and non-hospital service lines. The definitive agreement to sell the hospital in Lake Charles is the latest sale transaction to be announced. It appears that hospitals targeted for sale are underperforming hospitals in non-urban areas, many formerly owned by HMA.

Whether Middle Tennessee’s 245-bed Tennova Healthcare-Lebanon will be sold remains to be seen, but it would seem that THL meets Community Health Systems divestiture criteria. THL is a non-urban hospital with financial and utilization challenges; more than 70% of county residents go elsewhere for hospital services; THL was part of CHS’ ill-fated HMA acquisition in early 2014.

The complete Modern Healthcare article is located at http://www.modernhealthcare.com/article/20170501/NEWS/170509985?utm_source=modernhealthcare&utm_medium=email&utm_content=20170501-NEWS-170509985&utm_campaign=am