Dive Brief:
- After more than two decades together, CommonSpirit Health and AdventHealth are dissolving their joint venture managing hospital operations in Colorado and western Kansas.
- The management company, Centura, operates one of the largest hospital networks in the region, with 20 hospitals and a network of outpatient practices.
- In a release on Tuesday, the systems said the partnership had reached its “natural maturity.” CommonSpirit and AdventHealth didn’t lay out a timeline for the transition.
Dive Insight:
Centura has managed operations of AdventHealth and CommonSpirit in Colorado and Kansas since the two nonprofits joined together in 1996 to create the joint venture. But now, after 27 years of operation, the systems are dissolving the management company, with each organization agreeing to directly manage their own respective facilities that currently make up Centura.
Centura will continue to manage the hospitals and clinics throughout the transition. CommonSpirit and AdventHealth said there would be no disruption to patient care, though it’s unclear whether Centura’s thousands of employees will be able to transition to posts at either system.
A spokesperson declined to provide additional details on the reason for the split; the expected timing; or what will happen to Centura employees affected by the breakup.
Centura’s joint operating agreement gave CommonSpirit, then Catholic Health Initiatives, 70% of Centura’s revenues and hospital operator PorterCare 30% of revenues in the late 1990s. Florida-based Adventist nonprofit AdventHealth, then called Adventist Health Systems, later acquired PorterCare’s stake in Centura.
The management company’s financial health has declined in the past few years. In 2020, Centura operated at a loss of $7.5 million as expenses grew, according to financial documents filed with the IRS. That’s compared to a profit of $1.3 million in 2019.
2020 is the most recent year data is available. But Centura is unlikely to have escaped the persistent COVID-19 headwinds that hammered hospital finances in 2021 and 2022, pressuring bottom lines.
Centura is the latest joint venture nixed by CommonSpirit and AdventHealth. In September 2021, CommonSpirit disclosed it had sold part of its stake in an unnamed joint venture. Meanwhile, AdventHealth unwound its Chicago joint operating company with St. Louis-based nonprofit Ascension in 2021, after almost seven years.
Chicago-based CommonSpirit was formed by the merger of CHI and Dignity Health in 2019, and is the largest Catholic health system in the U.S.
After Centura is dissolved, CommonSpirit will manage 15 hospitals, while AdventHealth will manage five hospitals.
