Category Archives: Divestitures

Hospital and Health System M&A: Q1 2024 Review

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M&A Volume Up in Q1 2024 vs. Q1 2023: $10 billion Target Revenues


The number of hospital and health system M&A deals announced in the first quarter of 2024 was significantly higher than in the same period in 2023: 18 announced transactions with $10 billion in total revenues for the targets vs. 12 deals in Q1 2023 with a total of $3.4 billion in revenues for the targets. The 81 deals announced in the last 12 months is the highest it
has been over the last few years, building upon the recent momentum of hospital and health system mergers, acquisitions, and divestitures across the country.

Other observations by the Cain Brothers M&A team:

  • Significant number of for-profit conversions to not-for-profit (e.g., divestitures by Tenet and HCA)
  • Significant number of divestitures by national systems to regional health systems
  • Accelerated closing timeline for 3 deals in CA: closed in 30-60 days — prior to new hospital merger review process going into effect April 1, 2024 in CA
  • Q1 2024 total volume of 18 transactions with $10 billion in revenues for targets vs. $3.4 billion for Q1 2023
    This quarter saw transformative deals that may reshape how healthcare is delivered, reflecting creative partnerships that continue to form in a changing healthcare environment. Academic medical centers continue to make investments in assets
    of high strategic value to expand their clinical, teaching, and research capabilities. Large regional systems were quite active, with large cross regional mergers and smaller strategic acquisitions. With the Consumer Price Index (CPI) holding steady with the previous quarter, alleviation of supply cost pressures will benefit health system financials and allow them to deploy more capital.

In early January, General Catalyst’s healthcare investment subsidiary, Health
Assurance Transformation Corporation (“HATCo”), announced its intent to
acquire Summa Health, one of the largest integrated health delivery systems in
Ohio. This announcement made waves in the healthcare industry, not just
because of the size of the acquisition, but because it is the first major health system
investment for newly formed HATCo. General Catalyst, a venture capital firm
formed in 2000, is known for its investments in global companies including Airbnb,
Warby Parker, Snap, and Kayak. General Catalyst launched HATCo in October
2023 as a vehicle to enable health systems to enhance technological health
capabilities, improve financial results, and assist in meeting the shift to value based care, creating a sustainable and quality-driven healthcare model for providers and patients.

Under the terms of the deal, Summa Health will become a subsidiary of HATCo
and transition from a not-for-profit to a for-profit corporation. A community
foundation will be formed to continue to invest in the social determinants of health
to enhance community outcomes in the Akron-Canton region. With its first
acquisition, HATCo aims to become a chassis for future acquisitions and growth
for General Catalyst. The deal is expected to close by the end of 2024.

Academic medical centers were active acquirers in the first quarter of 2024. On
the West Coast, two University of California systems announced acquisitions from
for-profit operators. In January, UCLA Health announced it is the process to
acquire West Hills Hospital and Medical Center from HCA. The 260-bed hospital
is located in the San Fernando Valley, north of Los Angeles, and will be UCLA’s
first acute care hospital in the area. In February, UC Irvine Health signed a
definitive agreement to acquire Tenet’s Pacific Coast Network, which include
four hospitals in Los Angeles and Orange counties (see below for transaction
multiples). The acquisition greatly expands UCI Health’s presence and inpatient
bed capacity to complement their flagship UCI Medical Center in Orange. These
deals come off the heels of two other University of California deals announced in
2023; UC San Diego Health’s acquisition of Alvarado Hospital from Prime
Healthcare, and UCSF’s announcement to acquire two San Francisco hospitals
from Dignity Health, further demonstrating the UC system’s mandate to grow and
provide greater access to care in California.


Further east, the University of Minnesota announced in February its intent to
reacquire the University of Minnesota Medical Center from Fairview Health.
The University of Minnesota Regents voted to support a nonbinding letter of intent
with Fairview that would provide the ability for the University’s eventual ownership
of the medical center by 2027. The University of Minnesota previously sold the
medical center to Fairview in 1997.


In January, Penn Medicine announced it intends to acquire Doylestown Health,
a single-hospital system in Bucks County, PA. The seventh hospital for Penn
Medicine, the acquisition of Doylestown Health follows a trend of expansion for
Penn Medicine, with the acquisition of Chester County Hospital, Lancaster General
Health, and Princeton Health all within the past 10 years. The transactions by
academic health systems this quarter continue to follow the trend of AMC
expansion through development of new entry points into their care network,
investments in community health, and developing the ability to expand their
teaching and research capabilities.

In addition to the sale of its Pacific Coast Network to UC Irvine Health, Tenet also
sold Sierra Vista Regional Medical Center and Twin Cities Community
Hospital to Adventist Health in California. The two hospitals, located in San Luis
Obispo County in Central California, were sold to Adventist Health for
approximately $550 million, implying a Revenue and EBITDA multiple of 1.6x and
14.5x, respectively. The Pacific Coast Network transaction to UCI Health
announced in February came with a $975 million price tag, reflecting a 1.0x
multiple of revenue and 13.7x multiple of EBITDA. These transactions follow trends
of Tenet’s strategic divestitures in high value deals and reflect a broader trend of
acquisitions of targets of high strategic value to health systems. It is worth noting
that part of the reason for higher multiples in these California transactions is that
buying is still cheaper than the high cost to build.


Regional expansion continued this quarter in the Northeast with Nuvance Health’s
announcement in February that it will be joining Northwell Health. With seven
hospitals in Nuvance and the largest in the State of New York with Northwell, the
organizations would merge to form an integrated healthcare delivery system of 28
hospitals, 15,000 physicians, and over 1,000 care sites. In July 2023, Nuvance
received a credit downgrade from Moody’s driven by weakened operating
performance and reduced liquidity. As stated by both organizations, the merger
also allows Northwell to expand into Connecticut while making significant
investments in Nuvance’s existing clinical care footprint.


On the other hand, a number of regional mergers in recent years have been called
off, including this quarter with the cancellation of the proposed merger between
Essential Health and Marshfield Clinic. Previously announced in July 2023, the
health systems formally ended merger discussions in January, determining that
the affiliation was not the right path for the organizations. Marshfield previously
paused merger discussions with Gundersen Health System in 2019.

There were also a number of single hospital acquisitions and tuck-in transactions for larger systems. Below are highlights of a few other notable transactions announced this quarter:

In February, St. Louis- based Mercy announced its plans to acquire Via Christi Hospital, its
related physicians and other ancillary healthcare locations from Ascension. 152-bed Via Christi
hospital will be Mercy’s third hospital in Kansas, as Mercy continues to grow westward. In 2023,
Mercy acquired SoutheastHEALTH followed by its acquisition of Hermann Area District Hospital.

In January, Northern New Jersey health systems, CarePoint Health and Hudson Regional
Hospital announced they are seeking to form a new combined entity that will merge the for-profit and not-for-profit hospitals together. Hudson Health System will be the new namesake of the four hospital system. Under the proposed agreement, two of the four hospitals will remain not-for-profit safety net hospitals. The unique arrangement comes after the New Jersey Department of Health confirmed that CarePoint was in financial distress and began to work with local government leaders on a solution. CarePoint executive leaders confirmed the arrangement with Hudson Regional will improve the organization’s operational and financial strength.

Also in New Jersey, Atlantic Health System announced in January its intent to merge with Saint
Peter’s Healthcare. Atlantic Health, located in Morristown, NJ, is a seven-hospital health system
with locations across New Jersey and Pennsylvania. Saint Peter’s Healthcare is a catholic not-forprofit system with a 478-bed flagship hospital in New Brunswick, NJ. The announcement follows a 2022 judgment by the FTC to block a proposed merger between Saint Peter’s Healthcare and RWJBarnabas Health, citing the deal would cause anti-competitive concerns with merging New Brunswick’s only two hospitals.

WellSpan Health signed a definitive agreement to acquire Evangelical Community Hospital, a
131-bed acute care hospital in Lewisburg, PA. With the pending acquisition, the hospital will
become WellSpan Evangelical Hospital and will continue to serve the Central Susquehanna Valley. WellSpan is an eight-hospital system, serving six counties in Pennsylvania and two counties in Maryland. The deal is expected to close in July.

Each quarter, health system acquirers typically cite the need to grow and the desire to enchance clinical outcomes as motivating factors for deal activity. On the other hand, as we are seeing play out in real time, financial challenges area key driver of M&A for sellers. California-based Pipeline Health faces financial challenges as it retrenches its existing portfolio. In late 2023, Pipeline exited the Texas market driven by unsustainable financial losses. This example highlights the need for health systems to match mission-driven growth objectives with the reality of a harsh and volitile operating environment.


Portfolio rationalization, AMCs with the capital to make big bets, and inter-regional consolidations are major trends that will continue into 2024. With an election looming and an uncertain healthcare and regulatory landscape, affiliation opportunities will need to be thoughtful and metric driven.

Cigna to sell Medicare business as Medicare Advantage (MA) outlook declines for other big payers

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https://mailchi.mp/09f9563acfcf/gist-weekly-february-2-2024?e=d1e747d2d8

On Wednesday, Bloomfield, CT-based Cigna announced a definitive agreement with Chicago, IL-based Health Care Service Corporation (HCSC), a large Blue Cross Blue Shield insurer, to sell its 600K-member MA business, as well as its Medicare prescription drug plan and Medigap offerings, for $3.3B. 

The two insurers also agreed to a four-year services agreement where Cigna’s Evernorth Health Services subsidiary, which includes Express Scripts, will continue to provide pharmacy benefit services to the Medicare businesses.

While Cigna is exiting the MA market, other major payers—including UnitedHealth and Humana—are seeing their MA profits drop amid an increase in utilization, according to analysis from Moody’s Investors Service. 

The Gist: While it initially appeared that Cigna’s divesture of its MA business would position it to combine more smoothly with Humana, this deal with HCSC makes sense even in the wake of that reportedly called off merger. 

Cigna has been a bit player in MA for years, covering only two percent of MA lives in 2023, and the shrinking pie of MA profits will discourage all but the most successful or uniquely positioned payers. 

But while increasing utilization rates are contributing to a declining outlook for payers, MA is still a solidly profitable business, covering over half of Medicare beneficiaries and still growing by millions of lives each year. 

The MA payers that last are going to have to work harder at integrating their various care and data assets, and more carefully manage spend for an aging cohort of seniors with increasingly complex needs. 

Will health system M&A soar or dive?

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The health system deal market heated up in 2023.

Big, industry-shaking acquisitions including Oakland, Calif.-based Kaiser Permanente’s purchase of Danville, Pa.-based Geisinger, could redefine healthcare delivery with an eye toward value. Regional deals, such as Detroit-based Henry Ford Health’s planned joint venture with Ascension Michigan and St. Louis-based BJC HealthCare’s plan to acquire Saint Luke’s Health System to create a $10 billion organization, have also made waves.

There were 18 hospital and health system transactions announced in the third quarter, up from 10 transactions over the same time period in 2022, according to Kaufman Hall’s third quarter M&A report. Financial pressures with inflation catapulting staffing and supply costs, and reimbursement rates growing much more slowly, have forced some systems to look for a buyer while others aim to increase market share.

Academic health systems are also seeking community partners at a higher rate than in the past, according to the Kaufman Hall report.

But not all announced deals have gone according to plan.

The Federal Trade Commission is scrutinizing deals more closely than ever before to ensure costs don’t increase after an acquisition in some cases. In other cases, the two partners aren’t able to agree upon the details after announcing their plans. The dissolved merger between Sioux Falls, S.D.-based Sanford Health and Minneapolis-based Fairview Health Services fell apart amid contention in Minnesota, and West Des Moines, Iowa-based UnityPoint Health’s plans to merge with Presbyterian Healthcare Services in Albuquerque, N.M., was halted without a publicly stated reason.

Will there be more or fewer health system deals in the next three years?

Seth Ciabotti, CEO of MSU Health Care at Michigan State University in East Lansing, thinks so, at least when it comes to academic medical centers.

“There will be more consolidation to mitigate risk,” he told Becker’s. “I believe we are heading down a path of having only a dozen or so non-academic medical centers/health systems being left in the near future in the U.S.”

Mark Behl, president and CEO of NorthBay Health in Fairfield, Calif., has a similar outlook for the next three years.

“I suspect we will see more mergers and acquisitions with a continued desire to grow larger and remain relevant,” he told Becker’s. “Independent regional health systems will fight for relevance, and sometimes survival.”

And health systems won’t be the only buyers. Private equity, health insurers and non-traditional owners are on the hunt for health systems. General Catalyst has strengthened its healthcare presence recently and announced it plans to acquire a system in the near future.

“I believe that over the next three years, the landscape of acquisitions, divestitures and joint ventures will continue to reshape the healthcare industry,” said Dennis Sunderman, system director of HR M&A, non-employee and provider services at CommonSpirit Health, told Becker’s. “Current and proposed legislation, the continued evolution of ownership groups, nonprofit, for profit, and private equity, and the drive to hire and retain exceptionally talented teams, will lead to new innovations and an enhanced focus on the associates affected by the transaction.”

Health systems will need to optimize their operations to expand their value-based care efforts and digital transformation, including telehealth and remote patient monitoring services. Not all systems have the expertise and resources to fully make this transition, but with the right partners and strategic alignments, they can accelerate care transformation.

“There will likely be more collaborations and partnerships to expand services and increase access versus brick and mortar acquisitions,” said Cliff Megerian, MD, CEO of University Hospitals in Cleveland. “Innovative thinking is critical for success and quite frankly survival in our industry, so health systems should already be investing in growing in-house expertise dedicated to ideating new models of care, but in three years, these efforts should be producing tangible results.”

Michelle Fortune, BSN, CEO of Atrium St. Luke’s Hospital in Columbus, N.C., pointed to recent collaborations between Mercy, Microsoft and Mayo Clinic as examples of how health systems can partner on important initiatives such as improved data sharing, generative AI, digital transformation and more.

“I expect to see an increase in collaborations and connections between health systems to a degree that has never existed before as part of the focus on bringing the right care to people across the full continuum, when and where they need it,” she said.

Kaufman Hall sees more minority ownership deals ahead, which allows the smaller system to maintain near-autonomy while benefiting from the resources of a larger system.

“Health systems are also engaging in creative transaction structures that allow partners to maintain their independence while building strategic alliances that enhance access to care,” the report notes. “Announced transactions in Q3 included [Charlottesville, Va.-based] UVA Health’s acquisition of 5% ownership interest in [Newport News, Va.-based] Riverside Health System as part of a strategic alliance design ‘to expand patient access to innovative care for complex medical conditions, transplantation, and the latest clinical trials.'”

Babylon Health announces planned sale of California physician group

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https://mailchi.mp/cd392de550e2/the-weekly-gist-october-21-2022?e=d1e747d2d8

In a press release, London-based telemedicine provider Babylon Health said it intends to divest Meritage Medical Network, its 1,800-physician independent practice association located in Northern and Central California. Babylon claims the sale will allow it to better focus on its core business model of digital-first, value-based care contracts. After going public last year at $4.2B, Babylon’s valuation has fallen over 95 percent.

The Gist: Yet another highly touted healthcare startup with digital-first “solutions” has announced a massive pullback in its care footprint. As we wrote about Bright Health last week, these companies have failed to meet investor demands, and must now shutter services or sell assets to buy time to prove their core business model can actually turn a profit.

In Babylon’s case, integrating established physician practices into a digital-first, value-based care model was always going to be costly, challenging and time-consuming—too slow to deliver the returns demanded by an increasingly difficult investor market. 

Prospect Medical Holdings goes on hospital divestiture spree

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https://www.beckershospitalreview.com/hospital-transactions-and-valuation/prospect-medical-holdings-goes-on-hospital-divestiture-spree.html?origin=CFOE&utm_source=CFOE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G
Scoop: Prospect Medical seeks multiple buyers - Axios

Los Angeles-based Prospect Medical Holdings has inked deals to sell its seven hospitals in Connecticut and Pennsylvania. 

The company announced Feb. 10 that it is selling three Connecticut hospitals with a combined 708 beds to Yale New Haven (Conn.) Health System. The deal is expected to close later this year. If the deal is finalized, the hospitals will transition from for-profit to nonprofit organizations.  

Prospect Medical Holdings announced Feb. 11 that it is selling Crozer Health, a four-hospital system based in Springfield, Pa., to Newark, Del.-based ChristianaCare. Under the deal, ChristianaCare would acquire Crozer’s hospitals, medical group, ambulatory centers and clinics. Crozer’s hospitals have more than 800 beds combinded. 

The deal with ChristianaCare was announced the same day Crozer got a new CEO. The health system appointed Kevin Spiegel, senior vice president of strategy and revenue development at Prospect, as its new CEO. He replaced Peter Adamo, who served in that role at Crozer for two years. Mr. Adamo’s last day at Crozer was Feb. 11, according to the Philadelphia Business Journal.

“The pandemic has demonstrated the vital importance of working together to meet the clinical needs of the communities we serve,” Mr. Spiegel said in a Feb. 11 news release. “We are excited by the potential to join these two great organizations so that we can continue to provide the high-quality, accessible care that our communities — Delaware County and beyond — rely on.”

The sale of the hospitals to ChristianaCare is expected to close in the second half of this year. If the deal is finalized, Crozer would become a nonprofit organization. 

9 hospital deals called off

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How to pronounce Called Off - YouTube

In the last six months, several health systems have canceled plans to merge, acquire a hospital or unwind an existing partnership. 

Here is a breakdown of nine of them:

1. Ascension, AdventHealth to unwind partnership
Ascension and AdventHealth are unwinding their Amita Health partnership after working together for nearly seven years, the organizations announced Oct. 21.

2. SSM Health ditches deal to sell Missouri hospital to Quorum
St. Louis-based SSM Health has abandoned its plan to sell a Missouri hospital to Brentwood, Tenn.-based Quorum Health.

3. North Carolina system severs ties with Atrium, joins UNC Health
Carolinas HealthCare System Blue Ridge, a two-campus system in Morganton, N.C., cut ties with Atrium Health and partnered with UNC Health. Carolinas HealthCare System Blue Ridge and UNC Health finalized their management services agreement Oct. 1. Under the partnership, Blue Ridge will be renamed UNC Health Blue Ridge.

4. Tower Health won’t sell hospitals, pursues alliance with Penn Medicine
West Reading, Pa.-based Tower Health abandoned plans to sell the entire health system and instead will remain independent. It also signed a letter of intent to develop a strategic alliance with Philadelphia-based Penn Medicine.

5. Iowa hospital exits MercyOne affiliation
Mercy Iowa City (Iowa) is ending its affiliation with MercyOne’s health network in West Des Moines, Iowa.

6. LifePoint, Prisma Health call off hospital sale
A deal to sell the three hospitals in South Carolina fell through. Brentwood, Tenn.-based LifePoint inked a deal to sell the three hospitals and an ER to Greenville, S.C.-based Prisma Health, but the parties canceled the deal April 9. The health systems said significant delays and challenges with the Federal Trade Commission “made it prohibitive to move forward.” Medical University of South Carolina in Charleston later purchased the three hospitals.

7. Sentara, Cone Health nix merger
Norfolk, Va.-based Sentara Healthcare and Greensboro, N.C.-based Cone Health have abandoned plans to merge into an $11.5 billion system, the organizations said in a joint statement June 2. 

8. CommonSpirit’s plan to sell 14 hospitals to Essentia abandoned
Duluth, Minn.-based Essentia Health and Chicago-based CommonSpirit Health have abandoned a deal that would have added 14 hospitals and three clinics to Essentia Health’s network.

9. 2 hospitals to part ways with U of Kansas Health System
HaysMed, a single-hospital system in Hays, Kan., and Pawnee Valley Community Hospital in Larned, Kan., will depart from the University of Kansas Health System. The organizations mutually agreed to part ways.

‘I only see the potential for massive financial loss’: Former Spectrum CFO doubts value of Beaumont merger

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I only see the potential for massive financial loss': Former Spectrum CFO doubts value of Beaumont merger

Michael Freed, the former CFO of Spectrum Health, said he was “stunned” when he heard that the Grand Rapids, Mich.-based system plans to pursue a merger with Southfield, Mich.-based Beaumont Health, for myriad reasons. 

In a June 24 open letter to Spectrum’s board of directors, Mr. Freed said during his tenure they discussed possible mergers routinely and that a Spectrum-Beaumont combination “brought nothing new with it” and wouldn’t enhance value. 

“The markets didn’t overlap, so there were no significant administrative savings opportunities. The ability of each hospital to grow wasn’t enhanced by adding the other to the ‘system,'” Mr. Freed wrote. “In short, I never saw how such a merger could improve health, enhance value or make care more affordable. I still don’t.”

Mr. Freed was Spectrum’s CFO from May 1995 to December 2013. During his tenure, he helped oversee the formation of Spectrum and a substantive period of growth for the Michigan system. Mr. Freed also served as CEO of Spectrum’s health plan, Priority Health, from May 2012 until he retired in January 2016.

In his letter, Mr. Freed outlined several reasons he was “stunned” by the pursuit of the merger that would create a health system with 22 hospitals, 305 outpatient centers and about $13 billion in operating revenue.

Mr. Freed wrote that the merger with Beaumont, which is based in Southfield, Mich., may not be in the best interest of West Michigan. He said the combination of the two systems raises questions about whether governance truly will remain in the region and with Spectrum, if financial transparency will continue and if Spectrum will continue to honor the consent decree it signed in 1997 establishing a set of operational guidelines. 

If the merger moves forward, “debt can be placed on the books of West Michigan while investments EARNED IN West Michigan could be spent in SE Michigan … and vice versa,” Mr. Freed wrote. “If this entity should someday merge with other out-of-state entities, West Michigan could find itself investing in healthcare in other states as well, rather than in its own health.”

Mr. Freed raised concerns over the agreement between Spectrum and Beaumont to create a 16-person board of directors, seven of whom would come from Spectrum and seven from Beaumont. The CEO would come from Spectrum, and one new board member will be appointed. 

“While this structure looks to favor Spectrum Health initially, it would only take the hiring of a board member more favorable to Beaumont Health and the replacement of the CEO (in favor of Beaumont Health) for Spectrum Health to find itself outvoted 9 to 7 on key issues,” Mr. Freed said.

Additionally, Mr. Freed noted that the merger has the potential for massive financial losses to West Michigan. In particular, Mr. Freed said losses would stem from the financial assets of Spectrum and Priority Health no longer residing in West Michigan. 

“I’ll admit, I don’t see any value in this merger,” Mr. Freed wrote. “I only see the potential for massive financial loss, both historically and an undetermined amount going forward, to the region that produced all of Spectrum Health.” 

Mr. Freed urged the Spectrum board to take a few steps before moving forward with the merger, including selling or divesting Priority Health. 

“When you sign the documents that will permanently change this region, your signature will forever hold you accountable for the repercussions,” Mr. Freed wrote. “Please sign carefully.” 

Spectrum Health told MiBiz it remains committed to the commitments in the 1997 consent agreement and that it “remains enthusiastic” about the merger.

“Spectrum Health is fully committed to fulfilling its consent decree obligations and will continue to uphold its tenets,” the health system said. “We remain confident that creating a new system not only meets our current obligations to our local communities but will also improve the health of individuals in West Michigan and throughout the state.”

Access the full letter here. 

Tenet to sell 5 Florida hospitals for $1.1B as it doubles down on surgery centers

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https://www.healthcaredive.com/news/tenet-to-sell-5-florida-hospitals-for-11b-as-it-doubles-down-on-surgery-c/601975/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202021-06-17%20Healthcare%20Dive%20%5Bissue:34910%5D&utm_term=Healthcare%20Dive
Simultaneous Surgeries: Both Sides of the Debate Double Down

Dive Brief:

  • Tenet, a major U.S. health system, has agreed to sell five hospitals in the Miami-Dade area for $1.1 billion to Steward Health Care System, a physician-owned hospital operator and health network.
  • The deal also includes the hospitals’ associated physician practices. Dallas-based Steward has agreed to continue using Tenet’s revenue cycle management firm, Conifer Health Solutions, following the completion of the deal, which is expected to close in the third quarter.
  • Further underscoring Tenet’s strategic focus, the sale will not include Tenet’s ambulatory surgery centers in Florida. Tenet will hold onto those assets as its ambulatory business becomes a bigger focus for the legacy hospital operator.  

Dive Insight:

Dallas-based Tenet continues to bet on its ambulatory surgery business.

It’s noteworthy that this latest billion-dollar sale does not include any of its surgery centers in Florida, but half of its hospitals. Jefferies analyst Brian Tanquilut said the ambulatory segment now becomes even more important as it will contribute a majority of consolidated earnings in the near term. 

That’s a significant leap from 2014 when earnings from the ambulatory unit represented about 4% of the company’s earnings. 

The money generated from the sale could also pay for more ASCs, under Tenet’s unit, United Surgical Partners International (USPI), further bulking up Tenet’s ASC portfolio that already outnumbers its competitors.  

Tenet is traditionally viewed as a hospital operator, even though its surgery center footprint dwarfs its hospital portfolio. Tenet operates 310 ASCs following a $1.1 billion deal in December to acquire 45 centers from SurgCenter Development. Tenet said Wednesday it operates 65 hospitals.  

Of Tenet’s 10 Florida hospitals, Steward will buy up half, including Coral Gables Hospital, Florida Medical Center, Hialeah Hospital, North Shore Medical Center and Palmetto General Hospital.

Tanquilut said that leaves Tenet in control of its “core” south Florida business in the Boca and Palm Beach market, located about 75 miles north of the Miami area where Tenet is selling its hospitals.

During the volatile year of 2020, Tenet was able to post a profit of $399 million for the full year, which includes provider relief funding. As recovery continues, Tenet posted a profit of $97 million during the first quarter, which also includes federal relief due to the pandemic.

CommonSpirit and Essentia call off 14-hospital deal following nurse complaints

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https://www.healthcaredive.com/news/commonspirit-and-essentia-call-off-14-hospital-deal-following-nurse-complai/600427/?utm_source=Sailthru&utm_medium=email&utm_campaign=Newsletter%20Weekly%20Roundup:%20Healthcare%20Dive:%20Daily%20Dive%2005-22-2021&utm_term=Healthcare%20Dive%20Weekender

Dive Brief:

  • CommonSpirit Health and Essentia Health have called off a deal for Essentia to acquire 14 CommonSpirit facilities in North Dakota and Minnesota, the two Catholic systems announced Tuesday.
  • The deal, nixed just four months after being announced, would have doubled the size of Duluth, Minn.-based Essentia’s hospital network. One of the facilities up for grabs, CHI St. Alexius Medical Center, is a tertiary hospital and the other 13 are critical access hospitals. The deal would also have included associated clinics and living communities.
  • The systems did not provide details as to why they scrapped the deal in their release, and an Essentia representative did not respond to a request for comment by time of publication.

Dive Insight:

CommonSpirit and Essentia signed a letter of intent in January to explore the sale, but talks have now fizzled following months of deliberation.

“While we share a similar mission, vision, values and strong commitment to sustainable rural healthcare, CommonSpirit and Essentia were unable to come to an agreement that would serve the best interests of both organizations, the people we employ and the patients we serve,” a joint statement from the two systems said.

Earlier this month, more than 700 nurses and medical workers filed a petition noting their concern over the deal. In the petition, the Minnesota Nurses Association and employees at Essentia and CommonSpirit said they feared layoffs and restricted access to patient care resulting from the acquisition.

Nurses cited Essentia’s partnership with Mercy Hospital in Moose Lake, Minn., last summer, which they claimed hurt the quality of patient care.

“Ever since the takeover, we’ve lost numerous staff, causing shortages in how we care for patients,” a nurse wrote in a news release about the petition May 4. “We don’t want CHI’s hospitals and clinics to lay off workers, cut the services they offer or close entirely.”

Essentia did not respond to a request for comment about whether workers’ concerns affected the decision to call off the deal.

Hospitals maintain consolidation betters the patient experience and improves care quality, but numerous studies have suggested that’s not the case. One from early last year published in the New England Journal of Medicine found acquired hospitals actually saw moderately worse patient experience, along with no change in 30-day mortality or readmission rates, while another from 2019 found mergers and acquisitions drive up prices for consumers.

Despite that, provider mergers and acquisitions have continued at a rapid clip even during COVID-19, as hospitals look to divest underperforming assets and bulk up market share in more lucrative geographies. The letter of intent CommonSpirit signed with Essentia suggests the roughly 140-hospital system is taking stock of its smaller rural facilities.

Chicago-based CommonSpirit was formed in 2019 by the merger of nonprofit giants Catholic Health Initiatives and Dignity Health. The nonprofit giant was hit hard by the pandemic, losing $550 million in the 2020 fiscal year.

HCA to sell 4 Georgia hospitals for $950M

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https://www.beckershospitalreview.com/hospital-transactions-and-valuation/hca-to-sell-4-georgia-hospitals-for-950m.html?origin=BHRE&utm_source=BHRE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G
Tenet says it's on schedule to bring in $1B in proceeds through divestitures - MedCity News

HCA Healthcare will divest four of its hospitals in Georgia for about $950 million, the Nashville, Tenn.-based hospital system said May 3. 

The for-profit provider will sell the four facilities to Piedmont Healthcare, a nonprofit health system based in Atlanta. 

The four hospitals are the 310-bed Eastside Medical Center in Snellville; the 119-bed Cartersville Medical Center; and the two-hospital Coliseum Health System, which includes 310-bed Coliseum Medical Centers in Mason and 103-bed Coliseum Northside in Mason. Piedmont will also assume ownership of a behavioral health facility owned by the Coliseum Health System. 

HCA said the transaction will provide strategic value as it increases its financial flexibility to invest in its core markets. 

The two health systems expect the transaction to close in the third quarter of 2021. It still needs regulatory approvals.