CHS invests $100M in Lutheran Health Network
- Community Health Systems will pump $100 million into Fort Wayne, Indiana, by the end of this year via upgrades at its Lutheran Health Network subsidiary, Modern Healthcare reports.
- The investment includes a new orthopedics and sports medicine facility, new stretchers for emergency and radiology departments and new beds.
- CHS CEO Mike Poore announced the projects in a Thanksgiving message to employees.
CHS needs some good news. The company’s stock hit a new low on Nov. 13, trading as low as $6.98 per share. The Franklin, Tennessee-based health system, which ended 2016 a $1.7 billion loss, has announced 30 divestitures so far this year as it attempts to work down $15 billion in debt. In the 2017 third quarter, net operating revenues dropped 16.3%, hurt by declining admissions.
CHS’ struggles reflect those of many hospitals that are striving to adapt to smaller patient volumes and lower reimbursements in today’s value-based healthcare environment. Some are focusing on outpatient services while others are merging or looking to grow their geographic footprint. At for-profit hospitals, investors are also demanding accountability and a healthy bottom line.
For example, Tenet Healthcare recently signaled its exit from the Chicago market with an agreement to sell MacNeal Hospital and related operations to Loyola Medicine. The hospital chain, whose market share was just 2.1% in 2015, is reportedly in talks with potential buyers for its three other Chicago-area hospitals — Weiss Memorial Hospital, Westlake Hospital and West Suburban Medical Center.
Lutheran Health Network has had its own ups and downs this year. In May, a physician-led group tried to buy the eight-hospital network, saying its members didn't trust CHS to consider the interests of patients, staff or the community in making decisions. The bid followed an announced $500 million plan to invest in the network.
Shortly after, CHS fired Lutheran Health Network CEO Brian Bauer, who had supported the physician groups’ concerns about staffing and improvements. CHS maintained demands were aimed at improving physicians’ financial interests.
The physicians group eventually dropped their bid for Lutheran Health Network after CHS agreed to a “substantial capital commitment” and wage increases at the Fort Wayne system.
- Modern Healthcare CHS to invest $100 million in Forth Wayne market by the end of 2017