- Community Health Systems, currently the hospital system leader when it comes to the number of hospitals beneath its umbrella, is spinning off 38 of its 196 providers from smaller and rural regions into a new company in order to focus on larger markets.
- The new publicly traded company will be called Quorum Health Corp and will continue to be based in Tennessee.
- According to Modern Healthcare, the hospitals that are being spun off generated $2.1 billion in unaudited revenues last year, while CHS had revenues of $4.8 billion and net income of $111 million in Q2 2015.
CHS' clear intent here is to focus on the areas where the money is—and in the case of healthcare, that means the bigger markets.
The 38 hospitals being spun off span 16 states, with most of them located in small markets in Illinois, Georgia, Alabama, and Kentucky. One notable exception to providers that are being ditched? The companies that CHS acquired as part of its huge deal last year with Health Management Associated (just four hospitals acquired through that deal are being spun off into Quorum).
"This transaction will allow Quorum Health Corp.'s hospitals to focus on the changes in the healthcare delivery system, which are different in smaller community hospitals than in our larger and more urbanized markets," said CHS CEO Wayne Smith in a statement.