Rural and community hospitals and smaller health systems are struggling to push their operating margins back into the black, with many continuing to seek strategic partners or acquisitions to ensure access to care. Academic health systems are stepping up.
Financial pressures have forced many community hospitals to shut down departments, lay off employees or close services, which forces patients to travel further distances to regional centers — often academic centers — which have become overcrowded. Many of these hospitals also also need to undergo infrastructure improvements and digital transformation, both of which are expensive.
In addition to maintaining access to care in local communities, acquiring community hospitals offers various other benefits to academic health systems, including:
- Reducing the academic medical center's total cost of care by treating lower-acuity patients in a lower-cost community hospital setting.
- Enhanced reimbursement opportunities if the acquired facilities are designated as a critical access hospital or rural emergency hospital.
- Improving access to the academic medical center's services, expanding its clinicians and branding into new markets and boosting capacity at the main campus for higher-acuity care.
- Advancing the quality and scope of care at community hospitals by implementing care design protocols and other best practices to community hospital partners.
- Providing a talent pipeline for physician recruitment and residency programs in community hospital settings.
Here are 12 academic health systems in eight states that recently acquired or plan to add more hospitals:
Note: This is not a comprehensive list.
1. Morgantown.-based West Virginia University Health System, which operates under the brand name WVU Medicine, has expanded its community hospital through several recent acquisitions in the state, including:
- Weirton Medical Center
- Grant Memorial Hospital (Petersburg)
- Thomas Health (Charleston)
- Welch Community Hospital
2. The University of Michigan Health acquired Lansing, Mich.-based Sparrow Health System in April 2023, $7 billion health system. In August, Midland-based MyMichigan Health, a nonprofit system affiliated with the University of Michigan Health System, purchased three Michigan hospitals from St. Louis-based Ascension in August. MyMichigan also acquired the Ascension Medical Group care sites and physician practices associated with the hospitals, which include:
- Ascension St. Mary's (Saginaw)
- Ascension St. Mary's (Standish)
- Ascension St. Joseph (Tawas City)
3. UCSF Health acquired two hospitals — San Francisco-based Saint Francis Memorial Hospital and St. Mary's Medical Center — from Dignity Health in August for $100 million. UCSF will invest $100 million to support the integration of the hospitals, which have shed their religious affiliation and are now known as UCSF Health Saint Francis and UCSF Health St. Mary's.
4. Orange, Calif.-based UCI Health added 858 inpatient beds this year after acquiring four hospitals for $975 million from Tenet Healthcare's Pacific Coast Network. UC Irvine Chancellor Howard Gillman said the acquisition "will bridge gaps in regional care and advance the University of California’s mission to serve our communities." The hospitals:
- Fountain Valley Regional Hospital
- Lakewood Regional Medical Center
- Los Alamitos Medical Center
- Placentia-Linda Hospital
5. Washington (Pa.) Health, a two-hospital system, joined Pittsburgh-based UPMC in June. UPMC will invest at least $300 million over the next 10 years to improve services at the two hospitals, which have been rebranded as UPMC Washington and UPMC Greene hospitals.
6. The University of Alabama System aims to acquire Ascension St. Vincent's Health System, which includes five hospitals, for $450 million. Birmingham-based UAB Health expects the transaction to close in the fall, pending approval from federal regulators and the Catholic Church.
7. In July, Lexington-based UK HealthCare, part of the University of Kentucky, acquired St. Claire HealthCare in Morehead, Ky. The transaction follows UK HealthCare' December 2022 acquisition of King's Ashland, Ky.-based Daughters Health, a 465-bed system.
8. Dartmouth Health acquired Valley Regional Hospital, a 25-bed facility in Claremont, N.H., effective July 31. Lebanon, N.H.-based Dartmouth previously collaborated with Valley Regional for many services, including cardiology, oncology, pathology and radiology.
9. Philadelphia-based University of Pennsylvania Health System and Doylestown (Pa.) Health in August signed a definitive agreement for Doylestown to become part of Penn Medicine, a six-hospital system. The proposed transaction would lay the foundation for the development of new clinical programs and expanded services across the greater Philadelphia region and build upon existing clinical integration in cancer care between the two systems.
10. Emory Healthcare, an 11-hospital academic health system in Atlanta, in August signed a letter of intent for Houston Healthcare to join Emory. The proposed deal would add Houston Healthcare's two hospital campuses — totaling 282 beds — along with five outpatient facilities and nine physician practices to Emory's portfolio.
11. Detroit-based Henry Ford Health and Ascension Michigan on Sept. 30 launched a joint venture that essentially folded Ascension's sites of care in the southeastern region of the state under the Henry Ford Health brand. Bob Riney, president and CEO of Henry Ford Health, will lead the JV, which comprises about 50,000 employees atnd more than 550 care sites across Michigan under Henry Ford Health. The following 10 Ascension Michigan hospitals are covered by the JV:
- Ascension Genesys Hospital
- Ascension Macomb-Oakland Hospital and Warren, Madison Heights campuses
- Ascension Providence Hospital and Novi, Southfield campuses
- Ascension Providence Rochester Hospital
- Ascension River District Hospital
- Ascension St. John Hospital
12. Aurora, Colo-based UCHealth signed a letter of intent in October for Estes Park (Colo.) Health to join the health system in 2025. Under the LOI, UCHealth will invest more than $30 million into EPH as well as help stabilize its finances, recruit new employees, and expand virtual health and behavioral health services. UCHealth and EPH aim to complete a final agreement in the coming months, with a transaction closing date anticipated next spring.