Franklin, Tenn.-based Community Health Systems became the largest for-profit hospital operator in the nation in 2014 when it acquired Naples, Fla.-based Health Management Associates. Now, the company is selling off hospitals to pay down its debt.
As part of a turnaround plan put into place in 2016 to improve its finances and reduce its heavy debt load, CHS divested 30 hospitals in 2017. With the help of proceeds from the hospital sales, CHS brought down its long-term debt from $14.8 billion at the end of 2016 to $13.9 billion at the end of 2017.
To further reduce its debt, CHS is selling another group of hospitals with combined revenue of $2 billion. The company has made progress toward that goal. During its first-quarter earnings call in April, the company said the divestitures that were in the works are expected to close before the fourth quarter and will mark the end of a portfolio rationalization strategy it began nearly three years ago. CHS' long-term debt totaled $13.5 billion as of March 31.
Below are eight divestiture transactions CHS has announced or completed since Jan. 1.
Jan. 1: Community Health Systems completed the sale of its three Virginia hospitals on Jan. 1, roughly two months after entering into a definitive agreement with Cincinnati-based Bon Secours Mercy Health. The following hospitals were included in the transaction: 300-bed Southside Regional Medical Center in Petersburg; 105-bed Southampton Memorial Hospital in Franklin; and 80-bed Southern Virginia Medical Center in Emporia.
March 18: CHS entered into a definitive agreement to sell 130-bed Northern Louisiana Medical Center in Ruston, to Allegiance Health Management. Northern Louisiana Medical Center is the only CHS hospital in Louisiana.
April 20: CHS announced it signed a definitive agreement to sell 171-bed San Angelo (Texas) Community Medical Center to Shannon Health System in San Angelo. The transaction requires approval by the Texas Health and Human Services Commission, and CHS said the regulatory review process is expected to conclude by the end of the third quarter.
April 27: CHS announced it signed a definitive agreement to sell two hospitals in Texas. The company is selling 231-bed Abilene (Texas) Regional Medical Center and 188-bed Brownwood (Texas) Regional Medical Center to Abilene-based Hendrick Health System.
May 1: CHS completed the divestiture of 49-bed Shands Starke (Fla.) Regional Medical Center and 25-bed Shands Live Oak (Fla.) Regional Medical Center to Nashville, Tenn.-based HCA Healthcare, roughly three months after the parties entered into a definitive agreement. Under the agreement, CHS ended inpatient and nonemergency services at the two hospitals before the deal closed.
June 25: CHS announced it signed a definitive agreement to sell 480-bed Bayfront Health St. Petersburg (Fla.) to Orlando Health.
July 1: CHS completed the sale of St. Cloud (Fla.) Regional Medical Center to Orlando Health. The organizations completed the transaction about two months after entering into a definitive agreement. Under the deal, CHS sold its majority ownership in 84-bed St. Cloud Regional to Orlando Health, which held minority ownership for more than 15 years.
July 1: CHS completed the sale of Northern Louisiana Medical Center in Ruston to Allegiance Health Management. With the sale complete, CHS no longer operates any hospitals in Louisiana.