CHS continues divestitures with sale of 5 PA hospitals
- Community Health Systems (CHS) announced earlier this week it would sell five Pennsylvania hospitals to Reading Health System.
- Hospitals included in the transaction are the 169-bed Brandywine Hospital in Coatesville, 148-bed Chestnut Hill Hospital in Philadelphia, 63-bed Jennersville Hospital in West Grove, 151-bed Phoenixville Hospital in Phoenixville and 232-bed Pottstown Memorial Medical Center in Pottstown.
- The transaction is expected in Q3 2017 and the hospitals are part of 30 planned hospital divestitures. The system now owns or operates 146 hospitals in 21 states, down from 194 in March last year, Nashville Business Journal reported, adding CHS' debt is currently at $14.7 billion.
CHS is trying to get it's head above water by selling off assets. The deals are part of a major restructuring CHS put in place last year to reduce about $15 billion debt — stemming in part from its 2014 purchase of Health Management Associates (HMA) for $7.5 billion.
The company reported a $1.7 billion net loss last year and is hoping that selling off assets can right the ship. The large system recently completed the sale of nine hospitals but then rejected a $2.4 billion buyout offer from a physician-led group to acquire its Lutheran Health Network assets.
The Lutheran offer was not part of the planned divestitures. In fact, Lutheran Health Network announced a $500 million investment plan to invest to upgrade facilities. CHS reconfirmed its commitment to the upgrade investment after the buyout was rejected.
During an earnings call earlier last month, CEO Wayne Smith said hospital divestitures will be less of a focus in the future. "There may be one or two more (divestitures), but we're not specifically thinking about doing anything significant for the rest of the year," he said.
Financial details of the Pennsylvania deal were not disclosed.
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