- For-profit hospital system LifePoint Health and rehab and long-term care operator Kindred Healthcare plan to launch a new healthcare company, called ScionHealth, comprised of Kindred's 61 long-term acute care hospitals and 18 of LifePoint's community hospitals once LifePoint and Kindred's tie-up is complete.
- Tennessee-based LifePoint signed a definitive agreement to acquire Louisville-based Kindred in June for an undisclosed amount. But ScionHealth will be an entirely separate company from LifePoint, with separate leadership teams and boards of directors, the companies confirmed to Healthcare Dive.
- LifePoint and Kindred expect the transaction to close and ScionHealth to be launched by the end of this year, subject to regulatory approvals and other closing conditions. Moving forward, LifePoint will be comprised of its roughly 65 remaining community hospitals and physician practice network, as well as Kindred's rehabilitation and behavioral health businesses.
The Kindred acquisition announced earlier this year would have left LifePoint with some 200 acute, long-term and rehab hospitals, but the private-equity backed companies are electing to spin a number of facilities off into a separate business.
Upon close, ScionHealth will consist of 79 hospital campuses in 25 states, and will be focused on providing acute and post-acute care, as well as investing in community healthcare, the companies said.
"As our teams began to examine how best to bring together the operations of LifePoint and Kindred, it became increasingly clear that we had the right mix of talent, services and assets to reorganize into two strong companies to better serve our patients and communities," David Dill, president and CEO of LifePoint, said in a statement.
The facilities making up ScionHealth were selected due to being aligned in terms of operational and strategic growth, according to LifePoint and Kindred management.
The 18 facilities LifePoint is divesting to ScionHealth are primarily standalone or independently operating facilities in their regions, such as Palestine Regional Medical Center in Palestine, Texas; St. Joseph Regional Medical Center in Lewiston, Idaho; SageWest Health Care's facilities in Lander and Riverton, Wyoming.
Joining ScionHealth will allow the facilities more tailored attention and plans for growth, clinician recruitment and service line development, according to a spokesperson. After the transaction's close, each ScionHealth hospital will operate under the same name it does today.
At the deal's closing, LifePoint and ScionHealth anticipate entering into transition services arrangements, where a seller and a buyer agree to provide certain services to each other at a predetermined price. Details around those arrangements are still being worked out, the spokesperson said.
Both LifePoint and Kindred have private equity owners: PE firm Apollo acquired LifePoint in 2018 for $5.6 billion, while a number of PE groups (along with payer Humana) nabbed Kindred in 2017 before splitting off the long-term care and home health businesses.
In April, Humana agreed to buy the remaining stake in Kindred at Home for $5.7 billion, the largest acquisition in the payer's history.
ScionHealth will be based in Louisville, Kentucky, will be led by a management team drawing from both LifePoint and Kindred. Rob Jay, who currently serves as EVP of integrated operations at LifePoint, will serve ScionHealth's CEO.
Meanwhile, Benjamin Breier, Kindred's current CEO, will step down from his role as a result of the transaction.