HCA Healthcare has signed a $1.5 billion definitive agreement to acquire North Carolina nonprofit health system Mission Health.
Net proceeds from the agreement, still pending approval of the North Carolina attorney general, would go toward the newly-created foundation Dogwood Health Trust, which the companies said would "enable significant investments, encourage partnerships and facilitate coordination with others to analyze, understand and address core social determinants of health and well-being for the people and communities of Western North Carolina."
The purchase involves seven facilities, including the 763-bed Mission Hospital in Asheville, the 50-bed Mission Hospital McDowell and 80-bed CarePartners Rehabilitation. The other four hospitals have about 25 beds each.
Mission Health was named one of the nation's 15 Top Health Systems by IBM Watson Health in six of the last seven years. As the the sixth-largest healthcare system North Carolina, 133-year-old Mission provided $100 million in charity care last year.
The proposed sale, first announced in March, was met with concern by some North Carolinians worried that for-profit ownership would result in closed facilities and less access to care for rural areas of the state. A number of initiatives have targeted the area in hopes of tackling social determinants of health and improving outcomes.
HCA currently has 178 locally-managed hospitals and about 1,800 sites of care in 20 states and the U.K. While the system continues to expand its offerings, others like Community Health Systems have been shedding facilities over the past year.
In July, HCA reported a 7.4% revenue increase in the second quarter. Total reported admissions increased 4.5% year-over-year. HCA predicted $46.5 billion in revenues this year, which would improve over last year's numbers ($45.5 billion).
HCA President and COO Samuel Hazen said on the Q2 earnings call that 12 of the company's 14 divisions increased admissions. Recent acquisitions should bring "improved performance," but the company still expects a headwind for the year, he said.
The agreement is part of an ongoing M&A trend. The second quarter was the 15th in a row with more than 200 M&A healthcare deals, according to a PricewaterhouseCoopers report.
Though health systems tout mergers as a way to save costs, improve efficiencies and expand footprints, a recent analysis by the National Bureau of Economic Research found that acquired hospitals save only about 1.5% of total costs after a deal.