- CommonSpirit Health announced Wednesday that it will acquire regional health system Steward Health Care in Utah for $685 million.
- The deal marks CommonSpirit’s entry into Utah, expanding the hospital operator’s footprint to a total of 22 states.
- CommonSpirit will acquire five hospitals from Steward, along with more than 40 clinics and other ambulatory services, the system said. The deal is expected to close later this year. CommonSpirit’s Centura Health will manage the Utah sites.
The acquisition comes on the heels of a thwarted attempt by HCA to purchase Steward Health Care last year.
The Federal Trade Commission was successful in blocking the deal after the agency alleged that a tie-up between the head-to-head competitors would harm patients around Salt Lake City by raising prices and lowering care quality.
CommonSpirit said the deal represents a “significant long-term growth opportunity” and extends the system’s reach into a new region that already has an established presence with a variety of services, including acute, post-acute and ambulatory care.
The Catholic health system released financial results Wednesday for the period ended Dec. 31, the nonprofit’s second quarter, which showed a $474 million operating loss. The system said labor shortages, higher staffing costs and a recent ransomware attack dragged on its results.
“CommonSpirit is taking a number of steps to bolster its financial sustainability,” the system said Wednesday.
But officials would not comment on whether those steps may include job cuts.
So far, the ransomware incident has cost the system $150 million, it said Wednesday. The figure includes lost revenue due to the interruption to business and costs to remediate the issue.
CommonSpirit said it is working with insurance carriers but is unable to predict the timing or amount it may receive following the cyber incident.
Cyberattackers gained access to CommonSpirit’s network last fall in a breach that interrupted access to electronic health records and delayed patient care in multiple regions. CommonSpirit later told regulators that the breach exposed the private health information of more than 623,000 people.
Wednesday’s acquisition news follows CommonSpirit’s recent announcement that it is dissolving its long-term joint venture with AdventHealth. For more than two decades, the two operated hospitals in Colorado and western Kansas. The two will now manage their respective hospitals.