Dive Brief:
- Community Health Systems announced on Friday it has completed the sale of three Florida hospitals to Tampa General Hospital for about $294 million in cash.
- The deal includes 120-bed Bravera Health Brooksville, 124-bed Bravera Health Spring Hill and 128-bed Bravera Health Seven Rivers, as well as their associated assets, physician clinic operations and outpatient services, according to a press release.
- The sale allows the for-profit hospital operator to “deliberately focus our resources in markets that we deem as most investable and that can produce greater growth and returns over the long term,” CHS CEO Tim Hingtgen said during a call with investors shortly after the divestiture was announced this summer.
Dive Insight:
CHS has struggled financially this year and has posted losses in its past three quarters. The for-profit system missed Wall Street expectations on earnings per share in the third quarter and reported a net loss of $91 million, up from $42 million in the prior-year period.
During earnings calls, CHS leadership said it’s faced a challenging macroeconomic environment, adding that providers continue to suffer from inflationary pressures and reimbursement challenges. The country’s largest for-profit hospital chains generally posted mixed results in the third quarter, with most of them reporting declining profits compared with the same period last year.
CHS has recently made moves to divest other hospitals. In February, the for-profit chain announced it had signed a definitive agreement to sell two North Carolina hospitals to Novant Health for about $320 million. It also signed a deal to sell a hospital in Arkansas, and closed the sale of West Virginia-based Plateau Medical Center for $92 million this spring.
The latest CHS sale marks the largest recent acquisition for Tampa General, according to the nonprofit. The purchase will create TGH North, operating in Citrus and Hernando counties in the western region of the state.
Overall, hospital merger and acquisition activity is continuing to trend back to pre-pandemic levels, according to an October report from consultancy Kaufman Hall. But more than a third of the deals announced in the third quarter included a hospital or health system that cited financial distress as a driver for the deal, suggesting larger health systems are facing increased cost pressures from labor and other expenses.
